Interim Results

Deal Group Media PLC
06 September 2005


Press Release                                                   6 September 2005



                              Deal Group Media plc

        Unaudited Interim Results for the six months ended 30 June 2005

Deal Group Media plc, the full service online marketing group, today announces
its interim results for the six months ended 30 June 2005.

Highlights

•   First directly comparable results for the Group since the acquisition of The 
    Deal Group Limited in October 2003

•   Above online advertisting market growth rate achieved with turnover 
    increasing by 55 per cent to £10,171,000 (2004: £6,555,000)

•   pre-tax profits increased to £154,000 (2005:  £45,000).
•   EBITDA of £851,000 (2004:  £763,000)

•   Operating cash flow of £431,000 - increase in cash during the six months of 
    £419,000.

•   dgmPro - a new tracking, optimising and reporting system launched.  All 
    existing clients now using dgmPro.

•   Benefits of first half expenditure will not be seen until the second half of 
    the year.

•   Analyst estimates for UK online advertising spend expected to double by 
    2010. (Forrester Research)


Commenting on the results, Adrian Moss, Chief Executive, said:

'Our main objective as outlined in our 2004 Annual Report was to continue to
grow above the industry average.  I am pleased to report that our strategy of
client optimisation and new client wins has achieved this.  In the last six
months we have invested in a larger sales team and technology, which will also
continue to have a direct impact on our future development.  We continue to look
for complementary acquisitions in Europe which will diversify our portfolio and
further this growth.'




For further information, please contact:

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

Enquiries
Deal Group Media plc
Adrian Moss, Chief Executive                              + 44 (0) 20 7691 1880
Andrew Dickson, Finance Director                      www.dealgroupmediaplc.com

Panmure Gordon & Co
Richard Swindells                                     Tel: [phone]
[e-mail]                                   www.panmure.com

Chairman's statement for the six months ended 30 June 2005



These are the first directly comparable results for the Group since the
acquisition of The Deal Group Limited in October 2003. Last year the Group
reorganised and refocused the product offering - this work is now showing
tangible results.

During the first six months of 2005, the Group achieved an above market growth
rate with turnover increasing to £10,171,000 (2004: £6,555,000) that produced
pre-tax profits of £154,000 (2005:  £45,000).

On an EBITDA basis, the Group generated £851,000 in the first six months of 2005
(2004:  £763,000), with an increase          in the cost base of £595,000 which
includes 11 new sales people who have joined the Group in the first six months
and short term consultant costs involved in the re-design and launch of dgmPro -
our new tracking, optimising and reporting system. The benefits of this
expenditure will not be seen until the second half of the year. The new sales
team are showing a promising pipeline of new clients and all existing clients
are now using dgmPro and enjoying the benefits of quicker and more flexible
reporting.

The Group generated operating cash flow of £431,000 which led to an overall
increase in cash during the six months of £419,000.

Key Business Drivers

The continued growth of the Group has been driven by a number of factors:

According to OFCOM, there are now more broadband households than dial-up
households in the UK and the number of broadband users increases each week by
100,000. The rapid increase of the broadband market is expected to encourage
more advertisers to launch online marketing programmes.

Spend on Online Advertising has overtaken Radio for the first time in 2005
according to the Internet Advertising Bureau and now stands at 4% of UK
advertising spend. As the internet accounts for over 20% of the UK consumers'
media hours, the difference between these two figures should diminish over time.

As advertisers spend more online (Forrester Research forecasts online spend will
grow by 27% in the next year) dgm's managed solutions allow advertisers to focus
their products and brands to the most relevant people - those who actively
search for their product or brand. This varies from most traditional media in
that users are pulling information they want to access, rather than unsolicited
information being pushed at them - this is why online advertising is so
attractive to advertisers and why online advertising growth forecasts are much
higher than other forms of media.

Review of operations

As the online market develops we are confident that dgm is in a strong position
to coordinate an advertiser's marketing online to allow the advertiser to
dominate the search engines from which 85% of advertiser websites are found
(Forrester Research 2005 & EIAA).

Products

dgmPerformance delivers sales, leads and email capture or other commercially
valuable actions through a network of several thousand small online media owners
and entrepreneurs. dgm receives a revenue share from the advertisers for every
action that is taken.

Advertisers only pay once a predetermined action has been completed by a
consumer, such as the ordering of a brochure or the sale of a product.  The fee
paid for this cost-per-acquisition model is influenced by market forces and by
how much an advertiser is willing to pay to generate a result.

dgmAdNetwork offers low cost advertising on a variety of large portals and
content websites.  dgm acquires inventory at a low cost from various media
owners which is bundled and sold to advertisers at a discounted rate. The
advantage to advertisers is that the space is acquired at relatively inexpensive
rates on high traffic websites that enhance the prospect of a return on spend.

dgmSearchLab operates in two distinct areas of search engine marketing.  The
first is the fine tuning of clients' websites to allow superior listings on
search engines. Revenues are based on fixed fees and on improved listings on
search engines.

The second area involves the management of clients 'pay for performance' search
engine campaigns.  dgm bids on behalf of advertisers for listings on specific '
keyword' search terms.  The advertiser is listed as a 'Sponsored Link'.  dgm
derives its revenue from fees for the management of campaigns and commission
from the search engines on the media spend.

Technology

Over the last 12 months, the Group invested approximately £1,000,000 in dgm's IT
software and infrastructure.  I am pleased to be able to announce the launch of
our new proprietary software - dgmPro. This is the software that tracks, manages
and reports on all our online activity. The new system produces more user
friendly reports with increased tracking and reporting data. dgmPro runs off the
new site architecture that we invested in at the end of 2004.

dgm needs to maintain a competitive advantage and provide a service that is of a
higher standard than the new entrants to the market. I believe that dgmPro does
this today but that we must continue to strive to make the interface between the
advertiser and the campaigns as easy to use and understand as possible.

People

We have a talented team delivering for our clients, but as the size of the
business changes we are required to set higher client service standards and to
analyse the data to a deeper level. This year we have introduced management
training programmes and specific skills development programmes to meet these and
future challenges.

Strategy

The Board's aim is to continue to grow dgm above the industry average and we are
confident that we will be able to do this through a combination of approaches:-

  • continuing to optimise existing clients' return on online spending, while
    using dgmPro to increase the level and detail of reporting to improve
    efficiencies in every client program e.g. measuring comparative performance
    of clients' creative designs.

  • winning new clients is a key part of the Group's continuing success and we
    have increased the sales team by 11 new heads, including the former Head of
    Agency Sales at Yahoo, and are working directly with Agencies to deliver for
    their clients.

  • in addition, the Group is looking to diversify its portfolio of services
    through acquisitions which we believe will enhance our advertisers' ability
    to do online marketing in an efficient way with consistent reporting and
    tracking.

Management will continue to focus on the UK operations, although advantage will
be taken of acquisition opportunities in Europe.  Any target company needs to
have an immediate positive impact on the Group's ability to deliver for
advertisers and a committed, experienced management team.

Summary

The online advertising market has been extremely buoyant in the last 12 months,
currently accounting for 4.4 per cent of total advertising spend (IAB H2 2004)
and forecasters remain optimistic of further growth.

The growth is being fuelled by online consumer spending and broadband
penetration.  Online consumer spending is forecast to double from £10 billion in
2004 to £20 billion in 2007 (Forester Research), whilst broadband penetration in
the UK is expected to grow from 19% in 2004 to 42.3% in 2010 (Forrester
Research).  This level of growth is also reflected in Forrester Research analyst
estimates for UK online advertising spend which predicts that it will double by
2010.

Online Advertising is also forecast to grow at a faster rate than all other
media due to its accountability. In an advertising world where marketers strive
to justify the return on their advertising budget, dgm allows advertisers to
track their results and calculate their return on investment over all aspects of
the internet ranging from small hobby websites to the major search engines.

Consequently, the Board and I are confident that the outlook for the Group
remains strong.

Lord Stone of Blackheath
Chairman


5 September 2005


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 2005, which comprises the profit and loss account,
the balance sheet, the cash flow statement and notes 1 to 5. We have read the
other information contained in the interim report, which comprises only the
directors and advisers and 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 to it 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 and for ensuring that the
accounting policies and presentation applied to the interim figures are
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 2005.

GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS
LONDON THAMES VALLEY OFFICE
SLOUGH


Unaudited consolidated profit and loss account for the six months ended 30 June
2005


                                                                        6 months               6 months
                                                                     to 30 June 2005        to 30 June 2004
                                                           NOTES          £'000                  £'000

TURNOVER                                                                       10,171                  6,555

COST OF SALES                                                                 (6,754)                (3,821)

GROSS PROFIT                                                                    3,417                  2,734

ADMINISTRATIVE EXPENSES
 - Amortisation of goodwill                                                     (575)                  (574)
 - Depreciation of tangible fixed assets                                        (139)                  (142)
 - Other administrative expenses                                              (2,566)                (1,971)
                                                                              (3,280)                (2,687)

OPERATING PROFIT                                                                  137                     47

NET INTEREST                                                                       17                    (2)

PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                                                                   154                     45

TAXATION                                                     2                  (258)                      -

TOTAL (LOSS) / PROFIT AFTER TAXATION
FOR PERIOD                                                                      (104)                     45

BASIC (LOSS) / PROFIT PER SHARE                              3                (0.03p)                  0.01p

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

All operations are continuing.

The accompanying accounting policies and notes form part of these financial
statements.

Unaudited consolidated balance sheet as at 30 June 2005


                                                                           As at                  As at
                                                                       30 June 2005           30 June 2004
                                                                           £'000                  £'000

FIXED ASSETS
Intangible fixed assets                                                          6,388                  7,537
Tangible fixed assets                                                              488                    673
                                                                                 6,876                  8,210

CURRENT ASSETS
Debtors                                                                          4,980                  2,158
Cash at bank and in hand                                                         2,356                    590
                                                                                 7,336                  2,748

CURRENT LIABILITIES
Creditors:
 - Amounts falling due within one year                                         (4,054)                (3,050)

Net current assets/(liabilities)                                                 3,282                  (302)

Total assets less current liabilities                                           10,158                  7,908

Creditors:
 -  Amounts falling due after more than one year                                  (97)                   (91)

                                                                                10,061                  7,817
CAPITAL AND RESERVES
Called up share capital                                                          3,771                  3,588
Capital redemption reserve                                                      13,188                 13,188
Share premium account                                                           21,384                 21,116
Profit and loss account                                                       (28,282)               (30,075)

Shareholders' funds                                                             10,061                  7,817




The financial statements were approved by the board of directors and signed on
their behalf on 5 September  2005.



A. Dickson

Director


Unaudited consolidated cash flow statement for the six months ended 30 June 2005


                                                                         6 months               6 months
                                                                      to 30 June 2005        to 30 June 2004
                                                            NOTES          £'000                  £'000

Net cash outflow from operating activities                    4                    431                    169

Return on investments and serving of finance
Interest received                                                                   17                      2
Interest paid                                                                        -                    (4)

                                                                                    17                    (2)

Taxation                                                                          (47)                      -

Capital expenditure and financial investments
Purchase of tangible fixed assets                                                (129)                  (274)
Sale of current asset investment                                                     -                     78

                                                                                 (129)                  (196)


Net cash inflow/(outflow) before financing                                         272                   (29)

Financing
Issue of ordinary share capital                                                    178                     35
Inception of finance lease                                                           -                     23
Capital element of finance lease rentals                                           (8)                      -
Repayment of loan notes                                                           (23)                      -

                                                                                   147                     58

Increase in cash                                                                   419                     29


Notes to the financial statements for the six months to June 2005

1.         BASIS OF PREPARATION

The interim report should be read in conjunction with the statutory accounts for
the year ended 31 December 2004. The interim figures have been prepared on the
same basis and applying the same accounting policies as in prior periods.

2.         TAXATION

There are tax losses of approximately £4,889,550 to carry forward and use
against future profits of the same trades. These losses represent a potential
deferred tax asset of £1,466,865 at a corporation tax rate of 30%.

Tax losses have been utilised and offset against the profit for the period ended
30 June 2005.  This results in a reduction in the deferred tax asset carried
forward and a corresponding deferred tax charge for the period.  An explanation
of the deferred tax charge compared to the reported results is as follows:


                                                                         6 months                6 months
                                                                      to 30 June 2005         to 30 June 2004
                                                                           £'000                   £'000

Profit on ordinary activities before taxation                                      154                      45

Profit/(loss) on ordinary activities before taxation
multiplied by corporation tax rate of 30%                                           46                      14

Effect of:

Amortisation of goodwill                                                           173                     173
Other expenses not deductible                                                       39                       -
Losses carried forward                                                               -                   (187)

Current tax charge for the period                                                  258                       -

3.         (LOSS)/PROFIT PER SHARE

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

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

                                                                         6 months                6 months
                                                                      to 30 June 2005         to 30 June 2004

(Loss)/profit on ordinary activities after tax (£'000)                           (104)                      45

Weighted average number of shares                                          374,072,594             355,301,512

Amount of (loss)/profit per share in pence                                      (0.03)                    0.01


4.         NET CASH FLOW FROM OPERATING ACTIVITES

                                                                         6 months                6 months
                                                                      to 30 June 2004         to 30 June 2004
                                                                           £'000                   £'000


Operating profit/(loss)                                                            136                      47

Depreciation                                                                       139                     142
Amortisation                                                                       575                     574
Loss on sale of fixed assets / current asset investment                              -                       3
(Increase) / Decrease in debtors                                                 (486)                     540
Increase / (Decrease) in creditors and provisions                                   67                 (1,137)

Net cash flow from operating activities                                            431                     169


5.         COPIES OF THE INTERIM REPORT

Copies of the Interim Report are being sent to shareholders and are available to
the public from the Company's registered office at 19 Cavendish Square, London,
W1A 2AW, as well as the Company's business address at Unit 800 Highgate Studios,
53-79 Highgate Road, London, NW5 1TL

Copies can also be viewed online at www.dealgroupmediaplc.com

                                    - Ends -


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