Final Results

Deal Group Media PLC
18 April 2008


Press Release                                                  18 April 2008



                              Deal Group Media plc


                             ('DGM' or the 'Group')


                                 Final Results


Deal Group Media plc, the independent online marketing group, today announces
its final results for the year ended 31 December 2007.


Highlights

•     First full year results reported under IFRS representing the Group's continuing business only.
      The residual holding in the UK business has been classified as an associated undertaking and
      treated as discontinued operations for both 2007 and 2006
•     Turnover for the continuing operations was £9.4 million an increase of 45% (2006: £6.5 million)

•     Gross Profit for the year of £2.9 million (2006: £2.3 million)

•     Post tax loss for the year from continuing operations was £6.9 million (2006: £3.8 million) after
      accounting for a loss on disposal of the UK of £4.8 million
•     Continued growth in our Australian operation with sales increasing by 49% to £8.5 million

•     Increased foothold in the evolving digital advertising sector in the Asia Pacific region with
      several key client wins and strategic relationships
•     Successful sale of 51% interest in the Group's UK operation raising cash of £1.5 million



Commenting on the results, Adrian Moss, Chief Executive, said: 'I am pleased
with the progress of DGM's stated strategy to focus on the Asia Pacific region.
This can be demonstrated by the continued growth and evolution of our Australian
business and in Singapore with winning of several important contracts in early
2008. I expect our performance will continue to strengthen in 2008 following the
sale of the controlling interest of the UK business and I am excited about our
prospects.'




For further information, please contact:
Deal Group Media plc
Adrian Moss, Chief Executive                            Tel: [phone]
                                                   www.dealgroupmediaplc.com


Evolution Securities Limited
Tom Price, Corporate Finance                       Tel: [phone]
                                                    www.uk.evosecurities.com



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




Chairman's Statement

Having been involved with this Group for several years it gives me pleasure, as
recently appointed non-executive Chairman, to present the financial results for
2007.

These are the first full year results reported under International Financial
Reporting Standards ('IFRS') and after our sale of a controlling interest in the
UK operations on 12 December 2007 the Group's overseas operations now represent
our continuing business.

As the residual holding in the UK business is 49%, this operation has been
classified as an associated undertaking, with the results attributed to the UK
treated as discontinued operations for both 2007 and 2006.

The Board is very encouraged with progress in the continuing operations, which
showed a 45% increase in sales to £9.4 million (2006: £6.5 million) along with a
30% increase in gross profit to £2.95 million (2006: £2.27 million).

The loss on continuing operations after tax of £6.9 million (2006: £3.8 million)
is stated after accounting for a loss on disposal of a controlling interest in
the UK business of £4.8 million (2006: Nil). This loss on disposal is after the
write off of £6.0 million of associated goodwill remaining from the 2003
purchase of the DGM UK business. This leaves the balance sheet with no goodwill
moving forward.

The two key drivers of our 2007 business (continuing operations) were:


Continued growth in our Australian operation

The Australian operation saw continued growth with sales increasing by 49% to
£8.5 million with a resultant improvement in contribution to central overheads
of 24% to £0.91 million.

This operation was launched in the second half of 2003 and produced a positive
contribution for the first time in 2005 from sales of £1.5 million. Growth since
then has been impressive and the team have developed a strong market presence
and a relevant market offering.

The business model pursued has been further refined and stands as a solid
blueprint for expansion of that business model elsewhere in the region, led by
the same proven management.


The net impact of our Asia Pacific expansion strategy

At the beginning of 2007 the Group embarked on an Asia Pacific expansion, on the
back of its success in Australia, and the net cost of that investment in 2007
was £0.71 million, 30% less than anticipated.

This involved the launch of satellite operations in India and Singapore, along
with the relocation of much of the holding company team.

The Group is pursuing three business models there, all of which are focused on
different aspects of digital advertising and all are expected to show positive
contribution within less than twelve months of their respective launches.


Capital raising

Within the year, trading in the UK combined with the funding requirements of the
Asia Pacific business expansion led to a need to raise capital.  In January and
September 2007 the Group completed two separate fundraisings totalling £1.9
million.


Sale of a controlling 51% interest in the UK business

A continued decline in the performance of the UK operation in 2007 led the Board
to consider the divestment of the UK operations to facilitate cash generation
and strategic focus.  The overall trading performance in the UK operation showed
sales falling 28% to £11.6 million and a loss of £0.27m for the year compared to
a contribution to central overheads of £0.66m in 2006.

In the second half of 2007, the managing director of that business along with
our then Chairman, John Porter, tabled an offer for a controlling interest in
the UK operation. This was accepted and the transaction was completed at the end
of the year.


The sale of a 51% interest in the Group's UK operation to a management team has
been positive for the residual business:


•  Cash raised of £1.5 million
•  Undiluted focus in the Asia Pacific region
•  Retained 49% interest in the UK operation with upside exposure and mitigated risk
•  Immediate material reduction in the Group's technical and central cost base


The Group has an ongoing relationship with the UK operation with the Group
providing accounting services to the UK business and the UK business supplying
technology maintenance services under contract for the Group's core technology
products.


Board changes

Following the sale of the majority stake in the UK business, it was decided that
the requirement for UK based Board Directors was reduced.

Accordingly, John Porter, Lord Stone of Blackheath, Paul Alexander and Martin
Chalmers stepped down from the Board.  The Group now has a Board that is more
appropriate to the size, nature and location of the continuing business.

Since the year end, the non-executive Directors agreed to forego part of their
salary in return for options in order to align the board with the Group's
strategy and objectives to deliver long-term growth.


Outlook

The Group is encouraged by the trading in the first quarter of 2008.  Asia
represents 39% of global Internet usage or approximately 511 million users out
of a 1.4 billion worldwide Internet population (Source: Internetworldstats.com).
Despite the early stage of evolution for online advertising the Board feels that
the opportunities in the Asia Pacific region are considerable.

As a result, in the last year the Group has forged relationships with key
partners and has won contracts with significant brand names such as Barclays,
Deutsche bank, Citibank, Travel Guru, Jetstar, Panasonic, Dulux and Dyson. This
has led the business to create satellite operations in regions where there is an
immediate demand for our services.

This, combined with the Group's lower cost base following the transaction
referred to above, provides an efficient platform for future growth in the Asia
Pacific region.


David Lees
Chairman
17 April 2008



Consolidated income statement for the year ended 31 December 2007


                                                         Note                     2007             2006
                                                                                 £'000            £'000
Continuing operations

REVENUE                                                  2                       9,432            6,508
Cost of sales                                                                  (6,487)          (4,242)

GROSS PROFIT                                                                     2,945            2,266

ADMINISTRATIVE EXPENSES
 - Amortisation                                                                  (293)            (202)
 - Depreciation                                                                   (23)             (53)
 - Share based payments                                                          (177)            (298)
 - Other administrative expenses                                               (4,598)          (3,728)
                                                                               (5,091)          (4,281)

LOSS FROM OPERATIONS                                     3                     (2,146)          (2,015)

Interest received                                                                   16                8
Interest payable                                                                   (4)              (2)
Share of (loss) of associates                                                     (10)                -
Loss on disposal of subsidiary                           5                     (4,804)                -

LOSS BEFORE TAX                                                                (6,948)          (2,009)

Income tax                                                                          81          (1,806)


TOTAL LOSS AFTER TAXATION FROM CONTINUING OPERATIONS                           (6,867)          (3,815)

Discontinued operations

(LOSS)/PROFIT AFTER TAX FROM DISCONTINUED OPERATIONS                             (268)              658

                                                                                                    

TOTAL LOSS                                                                     (7,135)          (3,157)

Earnings per share

BASIC AND DILUTED LOSS PER SHARE                                               (1.69p)          (0.83p)

BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING
OPERATIONS                                                                     (1.63p)          (1.00p)
                                                                               

BASIC AND DILUTED (LOSS)/PROFIT PER SHARE FROM                              
DISCONTINUED OPERATIONS                                                        (0.06p)            0.17p

                                                                                                 




Consolidated balance sheet as at 31 December 2007

                                                                                  2007             2006
                                                                                 £'000            £'000

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment                                                      234              503
Goodwill                                                                             -            6,003
Other intangible assets                                                            678              627
Investment in associates                                                           478                -
Deferred tax                                                                         3                -
Available for sale financial assets                                                  -              152
                                                                                 1,393            7,285

CURRENT ASSETS
Trade and other receivables                                                      3,163            4,962
Cash and cash equivalents                                                          670              584
                                                                                 3,833            5,546

TOTAL ASSETS                                                                     5,226           12,831

EQUITY AND LIABILITIES

EQUITY
Called up share capital                                                          4,537            3,816
Capital redemption reserve                                                      13,188           13,188
Share based payment reserve                                                        704              527
Share premium account                                                           22,683           21,505
Translation reserve                                                                 54             (18)
Retained earnings                                                             (38,823)         (31,688)
TOTAL EQUITY                                                                     2,343            7,330

CURRENT LIABILITIES
Trade and other payables                                                         2,883            5,419
Corporation tax                                                                      -               82

TOTAL LIABILITIES                                                                2,883            5,501

TOTAL EQUITY AND LIABILITIES                                                     5,226           12,831





Consolidated cash flow statement for the year ended 31 December 2007

                                                                            2007                    2006
                                                                           £'000                   £'000
OPERATING ACTIVITIES

Loss after tax                                                           (7,135)                 (3,157)

Depreciation                                                                 320                     344
Amortisation                                                                 293                     145
Share based payment                                                          177                     298
Loss on sale of property plant and equipment                                   -                      44
Decrease/(increase) in receivables                                            32                   (538)
(Decrease)/increase in payables                                            (938)                     973
Foreign exchange differences                                                  72                       -
Finance income                                                               (7)                    (16)
Share of loss from associated undertakings                                    10                       -
Loss on disposal of subsidiary                                             4,804                       -
Tax (credit)/charge                                                         (81)                   1,803

Net cash outflow from operations                                         (2,453)                   (104)

INVESTING ACTIVITIES

Purchase of property, plant and equipment                                  (118)                   (396)
Purchase of shares in associated undertakings                               (42)                   (119)
Sale of current asset investment                                               -                      32
Consideration for disposal of subsidiary (net of cash disposed)              924                       -
Disposal of subsidiary net assets                                            268                       -
Purchase of intangible assets                                              (399)                   (642)
Interest received                                                             21                      27

Net cash generated / (used) in investing activities                          654                 (1,098)

Net cash outflow before financing activities                             (1,799)                 (1,202)

FINANCING ACTIVITIES

Issue of ordinary share capital                                            1,899                     203
Interest paid                                                               (14)                    (11)
Capital element of finance lease payments                                      -                    (43)
Repayment of loan notes                                                        -                    (45)

Net cash generated from financing activities                               1,885                     104

Net increase /(decrease) in cash and cash equivalents                         86                 (1,098)

Cash and cash equivalents at start of period                                 584                   1,682

Cash and cash equivalents at end of period                                   670                     584





Consolidated statement of changes in equity for the year ended 31 December 2007




                             Share       Share         Capital Share based     Translation    Retained      Total
                           capital     premium      redemption     payment         reserve    earnings     equity
                                                       reserve     reserve
                             £'000       £'000           £'000       £'000           £'000       £'000      £'000       
As at 1 January 2006         3,798      21,458          13,188         229               -    (28,531)     10,142

Exchange difference on
translation of foreign
operations                       -           -               -           -            (18)           -       (18)

Net income recognised
directly in equity               -           -               -           -            (18)           -       (18)
                          
Retained loss for the
year                             -           -               -           -               -     (3,157)    (3,157)
              

Total recognised
(expense)/income for the
year                             -           -               -           -            (18)     (3,157)    (3,175)

Share option grants              -           -               -         298               -           -        298

Shares issued in the          
year                            18          47               -           -               -           -         65

As at 31 December 2006       3,816      21,505          13,188         527            (18)    (31,688)      7,330

Exchange difference on       
translation of foreign
operations                       -           -               -           -              72           -         72

Net income recognised
directly in equity               -           -               -           -              72           -         72
                           

Retained loss for year           -           -               -           -               -     (7,135)    (7,135)

Total recognised
(expense)/income for the
year                             -           -               -           -              72     (7,135)    (7,063)


Share option grants              -           -               -         177               -           -        177

Shares issued in the year      721       1,178               -           -               -           -      1,899


As at  31 December 2007      4,537      22,683          13,188         704              54    (38,823)      2,343

                        

Notes to the financial information


1          Publication of non-statutory accounts

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 for the year ended 31 December 2007 has been extracted
from the group's financial statements to that date which have been prepared in
accordance with IFRS as adopted in the EU and which have received an unmodified
auditor's report but have not yet been delivered to the Registrar of Companies.

The financial information for the year ended 31 December 2006 (the comparative
financial information) is extracted from the same accounts and differs from the
information reported in the 2006 financial statements as the comparative
financial information has been restated in respect of conversion to IFRS and in
respect of a prior period adjustment.



2          REVENUE AND SEGMENTAL INFORMATION

All revenue relates to the supply of online marketing services. The directors
regard this as a single class of business.

Geographical segments have been identified as UK, Australia, Asia Pacific and
rest of the world.

Central and plc segment is not allocated to geographical segments as it is
represented by the costs of the plc and central overheads. This cannot be
specifically allocated to provide meaningful comparison so is deemed by
directors to constitute a separate segment for reporting purposes.


Year to 31 December    Australia       Asia   Rest of    Central      Total               UK              UK
2007                                Pacific     World      & Plc              (Discontinued)      Associates
                           £'000      £'000     £'000      £'000      £'000                            £'000

External sales             8,489        139       804          -      9,432           11,639             336

Segment result *             914      (709)      (90)    (6,982)    (6,867)            (268)            (96)

Segment assets             2,615        393       385      1,833      5,226            2,281             196

Segment liabilities        1,677        211       588        407      2,883            1,757             147

Capital expenditure           25         70         -          -         95               23              30

Additions to other
intangibles                    -          -         -        399        399                -               -
                    
Depreciation and
amortisation                  27          7        45        237        316              297              10
                    


* Included in Central and Plc is for the year ended 31 December 2007, is the
loss on sale of the UK business of £4,804,000.



Year to 31           Australia       Asia   Rest of     Central       Total  UK (Discontinued)              UK
December 2006                     Pacific     World       & Plc                                     Associates
                         £'000      £'000     £'000       £'000       £'000                              £'000

External sales           5,741          -       767           -       6,508             16,159               -

Segment result             735          -        48     (4,598)     (3,815)                658               -

Segment assets           2,006          -       723       6,678       9,407              3,424               -

Segment liabilities      1,622          -       765         719       3,106              2,395               -

Capital expenditure         63          -         -           -          63                374               -

Additions to            
other intangibles            -          -         -         505         505                  -               -

Depreciation and      
amortisation                8           -        45         436         489                274               -




3          LOSS FROM OPERATIONS

Loss from operations is stated after charging:

                                                                                   2007             2006
                                                                                  £'000            £'000

Foreign exchange gains and losses                                                     5                1
Amortisation of intangible assets                                                   293              145
Depreciation of property, plant and equipment                                       320              344
Auditor's remuneration for audit services                                            40               30
Auditor's remuneration for non-audit services                                        61               50
Operating lease rentals                                                             249              258
Share based payment costs                                                           177              298



Auditor's remuneration for non-audit services comprised other assurance services
£43,000 (2006: £33,000), compliance work for corporation tax of £8,000 (2006:
£9,000) and tax advisory work of £10,000 (2006: £8,000).




4          DISCONTINUED OPERATIONS
                                                                                    2007             2006
                                                                                   £'000            £'000

Revenue                                                                           11,639           16,159
Cost of sales                                                                      9,279           11,750
Administrative expenses                                                            2,628            3,751

Pre-tax profit / (loss)                                                            (268)              658

Loss on disposal                                                                 (4,804)                -



Discontinued operations relate to the part disposal of dealgroupmedia (UK)
Limited.



Cash flows from discontinued operations included in the Consolidated Cash Flow
Statement are as follows:


                                                                                          2007          2006
                                                                                         £'000         £'000

Net cash flows from operating activities                                               (2,053)            20

Net cash flows from investing activities                                                 (374)         (275)

Net cash flows from financing activities                                                     -             -

                                                                                       (2,427)         (255)






5          DISPOSAL OF SUBSIDIARY

On 12 December 2007 a 51% share of dealgroupmedia (UK) Limited was sold to ISCO
Technical Services Limited.

The calculation of loss on disposal is detailed below:


                                                                                                    £'000

Non-current assets                                                                                    154
Current assets                                                                                      1,652
Current liabilities                                                                               (1,281)

Fair value and book value of net assets disposed                                                      525

Share of net assets disposed (51%)                                                                  (268)

Consideration                                                                                       1,500
Legal fees                                                                                           (33)

                                                                                                    1,199
Allocation of goodwill                                                                            (6,003)
Loss on disposal                                                                                  (4,804)



Of the consideration of £1.5m, £1m was received on the 21 December 2007 and the
remaining £0.5m is included in other receivables. Of this amount, £0.3m was
received on 31 January and £0.2m remains receivable.


Copies of the financial statements will be sent to shareholders and are
available from the Company's registered office at 19 Cavendish Square, London,
W1A 2AW.



                                     -Ends-


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