Interim Results

Deal Group Media PLC
13 September 2004


Press Release                                                 13 September 2004



                              Deal Group Media plc

                      ('Deal Group Media' or 'the Group')

                                Interim results


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



(* Comparisons to IBNet plc period ended 30 September 2003)



Commenting on the 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.'



For further information, please contact:



Media enquiries:
Abchurch Communications
Ariane Vacher / Julian Bosdet                        Tel: [phone]
[e-mail]                        www.abchurch-group.com


Deal Group Media plc
Adrian Moss / Adam Black                                 + 44 (0) 20 7691 1880
[e-mail]                            www.dealgroupmediaplc.com

[e-mail]


Durlacher Ltd
Richard Swindells                                        + 44 (0) 20 7459 3600
[e-mail]                              www.durlacher.com




Chairman's statement



During the six months ended 30 June 2004, the Group continued its transformation
into a fully integrated business.  The Group is now firmly focused on three key
areas of online marketing which are aimed at delivering maximum return on
investment for advertisers: performance based online marketing, online
advertising and search engine marketing.



The former IBNet internet monitoring and intelligence service has been reviewed
and the Board decided not to proceed with this product.  The benefits of this
decision will mean lower costs and an improved focus on our core online
marketing offer.



Additional complementary channels are also in development and these will be
expected to contribute in late Q4 2004/Q1 2005.



The Group has adopted a range of successful strategies.  These include an
increased focus on a better quality client base (mentioned in our Annual Report
for the period to 31 December 2003), improved relationships with the UK's main
media buying agencies and other key strategic partners, and an increased
corporate and trade brand profile.



Results



With our first full six month period of combined operations included in the
interim results, the full benefits of the acquisition of The Deal Group by IBNet
are starting to be reflected in the Group's performance.  Financial performance
for the six months is very encouraging and reflects the speed with which the
business has been successfully transformed following the merger.



In reporting these interim results, the Directors note that the two previous
reported periods do not represent true comparisons for the Group as it now
stands.  The interim results for IBNet plc for the six months ended 30 September
2003 did not contain any contribution from Deal Group Media, and the results for
the nine months ended 31 December 2003 only contained a contribution from Deal
Group Media for just over two months.



Turnover for the six months ended 30 June 2004 was £6,555,000.  Operating profit
on ordinary activities after goodwill amortisation and depreciation was £47,000
and EBITDA for the period was £763,000.  Profit before taxation was £45,000 and
profit before taxation adjusted for amortisation of goodwill was £619,000.  This
financial performance reflects a significant change in the business, from
IBNet's previous activities to the robust, new entity that is Deal Group Media
plc.



Operational review



We are extremely pleased with the performance of the Group in this first
significant period of trading for the combined entity.  The proven strength of
key management and highly driven sales and account management teams are
delivering new clients and the results needed to retain them.



During the period, we have won business or further developed existing activities
with clients including: 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.



The business development strategy continues to target clients directly as well
as a growing roster of agency partners that amongst others includes: Carat,
I-level, initiative, phd media, Tribal DDB, Manning Gottlieb, Universal McCann
and WWAV Rapp Collins.  Agencies have emerged as clients in themselves and key
partners in acquiring new advertisers.  We look forward to further developing
these and other agency relationships over the next six months.



Key growth sectors are: mobile telecommunications, broadband, financial and
automotive, with further growth coming from gaming, travel and retail.



We continue to lead best practice within the industry by adopting a firm ethical
stance on online marketing for our clients and their customers.  Publisher
quality is constantly monitored and we have developed our search engine
marketing service to sit within guidelines set by Google and our other key
search partners.



These initiatives will continue to provide a platform to build business for the
Group over the second half of 2004.



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.



There are also numerous positive indicators for the sector.  Growth in online
marketing continues to outpace other forms of marketing.  A recent Institute of
Practitioners in Advertising report highlighted 26% of companies confirming an
upward revision in their online marketing budgets and that many favour online
spend over classic media.  According to AC Nielsen, search is the preferred
method of finding an advertiser for 42% of internet users.  The 2004
e-consultancy affiliate marketing report highlighted that leading retail
websites receive up to 20% of their online sales from affiliate marketing and
estimates of market size are at least double that of 2003.  Continued growth in
the adoption of broadband, currently at 18% in the UK compared to 28.5%
penetration in the US, is expected to increase internet media consumption
threefold.  Last September's Mediapost survey rated online advertising first, as
the most measurable media, generating the greatest return on investment.  Taking
into account this all round growth, increased support from marketing decision
makers and the positive consequences of broadband adoption, the outlook for
online marketing grows ever more positive.



David Lees

Chairman

13 September 2004

Independent Review report to Deal Group Media plc



Introduction

We have been instructed by the Company to review the financial information for
the six months ended 30 June 2004 which comprise the consolidated profit and
loss account, balance sheet, cash flow statement and associated notes.  We have
read the other information contained in the interim report which comprises only
the Chairman's Statement and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.  Our
responsibilities do not extend to any other information.



This report is made solely to the Company, in accordance with guidance contained
in APB Bulletin 1999/4 'Review of Interim Financial Information'.  Our review
work has been undertaken so that we might state to the Company those matters we
are required to state in a review report and for no other purpose.  To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company, for our review work, for this report, or for the
conclusion we have formed.



Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors.  The Directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom.  A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed.  A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions.  It is
substantially less in scope than an audit performed in accordance with United
Kingdom auditing standards and therefore provides a lower level of assurance
than an audit.  Accordingly, we do not express an audit opinion on the financial
information.



Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2004.



GRANT THORNTON UK LLP

CHARTERED ACCOUNTANTS

LONDON THAMES VALLEY OFFICE

SLOUGH






Consolidated profit and loss account for the six months ended 30 June 2004


                                                                      6 months          9 months          6 months
                                                                 to 30 Jun '04     to 31 Dec '03     to 30 Sep '03
                                                                     Unaudited           Audited         Unaudited
                                                     NOTES               £'000             £'000             £'000

TURNOVER                                                                 6,555             2,965               878

COST OF SALES                                                          (3,821)           (2,038)             (393)

GROSS PROFIT                                                             2,734               927               485

ADMINISTRATIVE EXPENSES
 - Amortisation of goodwill                                              (574)             (485)             (228)
 - Depreciation of tangible fixed assets                                 (142)             (119)              (57)
 - Other administrative expenses                                       (1,971)           (1,853)             (823)
                                                                       (2,687)           (2,457)           (1,108)

OPERATING PROFIT / (LOSS)                                                   47           (1,530)             (623)

Exceptional items                                                            -             (280)                 -

Profit / (loss) after exceptional items                                     47           (1,810)             (623)

NET INTEREST                                                               (2)              (22)              (23)

PROFIT / (LOSS) ON ORDINARY ACTIVITIES                                      45           (1,832)             (646)

TAXATION                                                                     -                 -                 -

TOTAL PROFIT / (LOSS) AFTER TAXATION
FOR PERIOD                                                                  45           (1,832)             (646)


BASIC PROFIT / (LOSS) PER SHARE                        2                 0.01p           (1.15p)           (0.76p)




There were no other recognised gains or losses other than the profit for the
period.



Consolidated balance sheet as at 30 June 2004

                                                                         As at             As at             As at
                                                                    30 Jun '04        31 Dec '03        30 Sep '03
                                                                     Unaudited           Audited         Unaudited
                                                                         £'000             £'000             £'000

FIXED ASSETS
Intangible fixed assets                                                  7,537             8,111             1,317
Tangible fixed assets                                                      673               622                63
                                                                         8,210             8,733             1,380

CURRENT ASSETS
Debtors                                                                  2,158             2,698               245
Cash at bank and in hand                                                   590               561                 -
                                                                         2,748             3,259               245

CURRENT LIABILITIES
Creditors:
 - Amounts falling due within one year                                 (3,050)           (4,541)             (875)

Net current liabilities                                                  (302)           (1,282)             (630)

Total assets less current liabilities                                    7,908             7,451               750

Creditors:
 -  Amounts falling due after more than one year                          (91)             (193)             (736)
Provision for liabilities and charges                                        -                 -             (177)

                                                                         7,817             7,258             (163)

CAPITAL AND RESERVES
Called up share capital                                                  3,588             3,504            14,067
Capital redemption reserve                                              13,188            13,188                 -
Share premium account                                                   21,116            20,686            14,704
Profit and loss account                                               (30,075)          (30,120)          (28,934)

Shareholders' funds                                                      7,817             7,258             (163)






Consolidated cash flow statement for the six months ended 30 June 2004

                                                                      6 months          9 months          6 months
                                                                 to 30 Jun '04     to 31 Dec '03     to 30 Sep '03
                                                                     Unaudited           Audited         Unaudited
                                                     NOTES               £'000             £'000             £'000

Net cash inflow /(outflow) from operating              3                   169             (817)             (222)
activities

Return on investments and serving of finance
Interest received                                                            2                 5                 -
Interest paid                                                              (4)              (25)              (23)
                                                                           (2)              (20)              (23)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                        (274)             (332)               (2)
Sale of current asset investment                                            78                84                84
                                                                         (196)             (248)                82

Acquisition
Cash acquired on acquisition                                                 -               169                 -
Expenses paid in connection with acquisition                                 -             (342)                 -
                                                                             -             (173)                 -

Net cash outflow before financing                                         (29)           (1,258)             (163)

Financing
Issue of ordinary share capital                                             35             1,750                 -
Inception of finance lease                                                  23                 -                 -
Capital element of finance lease rentals                                     -               (7)               (4)
Repayment of loan notes                                                      -              (28)                 -
                                                                            58             1,715               (4)


Increase/(decrease) in cash                                                 29               457             (167)





Notes to the financial statements for the six months to 30 June 2004



1.         BASIS OF PREPARATION


The six months to 30 June 2004 reflect the first accounting period with the 
combined operations following the acquisition of The Deal Group Limited.



The interim information for the six months ended 30 June 2004 and 30 September
2003 is unaudited and does not comprise statutory accounts.  The comparative
figures for the period ended 31 December 2003 are not statutory accounts but are
extracted from the audited statutory accounts.  The statutory accounts for the
period ended 31 December 2003 have been filed with the Registrar of Companies. 
They received an unqualified audit report which did not contain a statement
under Section 237(2) or 237(3) of the Companies Act 1985. The interim report
should be read in conjunction with the statutory accounts for the period ended
31 December 2003.  The interim figures have been prepared on the same basis and
applying the same accounting policies as in prior periods.







2.         PROFIT/(LOSS) PER SHARE


The calculation for the basic profit/(loss) per share is based upon the 
profit/(loss) attributable to ordinary shareholders divided by the weighted 
average number of shares in issue during the period.



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




                                                              6 months            9 months            6 months
                                                         to 30 Jun '04     to 31 Dec '03        to 30 Sep '03
                                                             Unaudited             Audited           Unaudited

Profit/(loss) on ordinary activities (£'000)                        45             (1,832)               (646)

Weighted average number of shares                          355,301,512         159,517,300          84,952,000

Amount of profit/(loss) per share in pence                        0.01              (1.15)              (0.76)






3.         NET CASH FLOW FROM OPERATING ACTIVITES


                                                              6 months            9 months            6 months
                                                         to 30 Jun '04       to 31 Dec '03       to 30 Sep '03
                                                             Unaudited             Audited           Unaudited
                                                                 £'000               £'000               £'000

Operating profit/(loss)                                             47             (1,530)               (623)

Exceptional items                                                    -               (280)                   -
Depreciation                                                       142                 119                  57
Amortisation                                                       574                 485                 228
Loss on sale of fixed assets / current asset                         3                  42                  23
investment
(Increase) / decrease in debtors                                   540             (1,864)                  23
(Decrease) / increase in creditors and provisions              (1,137)               2,211                  70

Net cash flow from operating activities                            169               (817)               (222)






4.         COPIES OF THE INTERIM RESULTS


Copies of the Interim Results are being sent to shareholders and are available 
to the public from the Company's registered office at 19 Cavendish Square, 
London, W1A 2AW.  Copies of the Interim Results can also be viewed online
at www.dealgroupmediaplc.com





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