Interim Results

Deal Group Media PLC
27 September 2006


Press Release                                                 27 September 2006



                              Deal Group Media plc



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



        Unaudited Interim Results for the six months ended 30 June 2006



Deal Group Media plc, the full service online marketing group, today announces
its Interim Results for the six months ended 30 June 2006.



Results Summary


•     Turnover increased to £12,824,000 (2005: £10,171,000)


•     Operating loss of £1,501,000 (2005: £48,000 profit)


•     EBITDA loss of £586,000 (2005: £851,000 profit)


•     Costs of £718,000 incurred in relation to the restructuring of the 
      business which should not recur

•     Underlying growth of 45% from continuing business


•     Proprietary technology platform strengthened to allow product expansion


•     Strong performances from the Australian office and the recently opened 
      South African office



Commenting on the results, Andrew Dickson, Chief Executive, said:

'Following the Chairman's review and as part of the turn around, the Group has
been through a period of change.  During much of this period our focus has been
to stabilise and then develop our proprietary technology platform.  Having
achieved this, we are now seeing an increase in demand for our services and
remain confident that despite competitive market conditions we can continue to
win new customers with existing and innovative new products.'




For further information, please contact:
Deal Group Media plc                                  www.dealgroupmediaplc.com
Andrew Dickson, Chief Executive                           + 44 (0) 20 7691 1880



Media enquiries:
Abchurch Communications
Charlie Jack / Franziska Bohnke                       Tel: [phone]
[e-mail]                          www.abchurch-group.com





Chairman's statement


Following my review of the business, the management team, led by Andrew Dickson,
has implemented and completed many of the changes required to take the Group
forward.  These changes have had a cost which, as part of the turn-around,
should not be recurring and are necessary to position the Group to enable it to
take advantage of a growing market.



Financial Performance

Group turnover increased to £12,393,000 in the first half of 2006, an increase
of 19% from the second half of 2005.  As we had predicted at the Preliminary
Results the gross profit margin fell from 31% in the second half of 2006 to 28%
in the first half of 2006.



Underlying growth from continuing business is up 45% over the first 6 months of
2005, after removing the contribution made by the major customer lost in the
second half of 2006.



The cost base has increased significantly as the team has worked to improve the
affiliate platform. The cost base includes £718,000 in relation to the
restructuring of the business.  The majority of these costs, that are unlikely
to be incurred again, relate to the major technology infrastructure changes that
we have implemented and costs associated with key personnel changes.



Although the Group made an EBITDA (Earnings before Interest Depreciation and
Amortisation) loss of £586,000 (2005: £851,000), I believe that the business has
moved to regain its standing with the affiliate community in terms of a solid
product offering that is backed up by robust technology.



We continue our strategy of providing clients with choice about the level of
involvement with our systems and we have continued to develop ways of making the
services provided to clients more efficient, while not affecting the control and
advice we give to them.




dgm Affiliates

The first quarter's results include the last elements of some of the accounts
lost in 2005.  Recently, as our technology and internal process have improved,
the account management team have won several re-pitches.  Several clients who
introduced second networks to their programmes are now reverting back to single
networks and I am pleased that dgm is more often than not being chosen as that
network.



The affiliate landscape is competitive, and at the last count, there were twenty
four affiliate networks operating in the UK.



With the publicised technology issues in 2005, we had low expectations for
client wins in the first half of  2006, the results were therefore in line with
our expectations and now I expect to see an improvement in the second half of
the year.



The Fuel AdNetwork

Our AdNetwork business delivers 35 million impressions a month for our clients
while representing some leading sites in the UK such as Match.com, eacademy and
Manchester Evening Arena.



This division was subject to high staff turnover in 2005 but a new team has now
been formed.  The business has moved to using the Helios platform and is taking
full advantage of customer targeting technology available.  This positions us as
a top performing Network in the UK.



Webgravity

The interaction of Search Engines and customers is key to all our business
units. The Webgravity team have been selected to give advice on Natural Search
Optimisation for several new clients in 2006, and I believe their services will
be in greater demand as several new search engines, including MSN Search, launch
later this year.



Technology

There has been a complete overhaul of how our technology is organised.  Carl
Davis has been appointed Head of Technology and has recruited a new team.  The
team has released two upgrades to dgmPRO, our proprietary software that
affiliates and clients can interface with and it has received praise from both
groups.



As the internet has matured advertisers wish to be able to allocate sales to
channel on a transparent basis and dgm has developed technologies to allow the
advertiser to do this with no manual intervention.



There has been a significant overhaul of the dgm hardware infrastructure leading
to cost savings in the future and a sensible backbone to take the Group forward
for future expansion.



Overseas

Our Australian office has taken advantage of the expansion of broadband internet
in Australia and as a result is capitalising on the growing demand for online
marketing services.  Through perseverance it has established a strong position
in their market which now contributes significantly to the Group's profit and
loss account.



I am please to report that we have opened our South African office and believe
that this will have recouped the start up costs by the end of the year.  We
continue to look at avenues for international expansion.



Staff

The dgm team have worked extremely hard on the challenges presented to them. I
have been very impressed by their high quality and dedication..



Our Graduate programme continues to deliver for the Group and we have maintained
this programme in 2006.  The rate of staff turnover has now returned to industry
standard.



Expressions of Interest

On 13 February the Group announced that it had received more than one approach
which may or may not lead to an offer being made for the entire issued and to be
issued share capital of the Group.  These approaches were all of a preliminary
nature, however they led to a number of further approaches.  On 12 July we
announced that the Board was in ongoing preliminary discussions with several
parties which may or may not lead to a corporate transaction.



We continue to evaluate these approaches, as well as other potential
partnerships, in order to ascertain the appropriate way forward that can create
shareholder value.



Overall

The wins that have been achieved in account management from existing clients
must now translate into new client wins, and this will be the focus for the
second half of the year.



I believe that we have moved forward a long way in the period and I look forward
to the future developments.




John Porter

Chairman






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 2006, which comprises the profit and loss account,
the balance sheet, the cash flow statement and notes 1 to 4. 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 2006.



Grant Thornton UK LLP
Registered Auditors

Chartered Accountants
London Thames Valley Office
Slough




Consolidated profit and loss account
For the six months ended 30 June 2006


                                                  NOTES           6 months      6 months     12 months
                                                                to 30 June    to 30 June     to 31 Dec
                                                                        06            05            05
                                                                              (restated)    (restated)
                                                                     £'000         £'000         £'000

TURNOVER                                                            12,824        10,171        20,561

COST OF SALES                                                      (9,322)       (6,754)      (13,876)

GROSS PROFIT                                                         3,502         3,417         6,685

ADMINISTRATIVE EXPENSES
 - Amortisation of goodwill                                          (575)         (575)       (1,149)
 - Fixed assets depreciation                                         (187)         (139)         (292)
 - Share based payments                                              (153)          (89)         (181)
 - Other administrative expenses                                   (4,088)       (2,566)       (5,593)
                                                                   (5,003)       (3,369)       (7,215)

OPERATING (LOSS) / PROFIT                                          (1,501)            48         (530)

NET INTEREST                                                            10            17            36

(LOSS) / PROFIT ON ORDINARY ACTIVITIES                             (1,491)            65         (494)

TAXATION                                            2                (695)         (258)             -

TOTAL LOSS AFTER TAXATION
FOR PERIOD                                                         (2,186)         (193)         (494)

BASIC AND FULLY DILUTED LOSS
PER SHARE                                           3              (0.58p)       (0.05p)       (0.13p)




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.



Consolidated balance sheet
At 30 June 2006


                                                                     As at           As at           As at
                                                                30 June 06       30 Jun 05       31 Dec 05
                                                                                (restated)      (restated)
                                                                     £'000           £'000           £'000

FIXED ASSETS
Intangible fixed assets                                              5,443           6,388           5,857
Tangible fixed assets                                                  531             488             647
                                                                     5,974           6,876           6,504

CURRENT ASSETS
Debtors                                                              4,991           4,980           6,150
Cash at bank and in hand                                             2,551           2,356           1,682
                                                                     7,542           7,336           7,832

CURRENT LIABILITIES
Creditors:
 - Amounts falling due within one year                             (5,574)         (4,054)         (4,317)

Net Current Assets                                                   1,968           3,282           3,515

Total assets less current liabilities                                7,942          10,158          10,019

Creditors:
 - Amounts falling due after more than one year                        (7)            (97)            (65)


                                                                     7,935          10,061           9,954

CAPITAL AND RESERVES
Called up share capital                                              3,800           3,771           3,798
Capital redemption reserve                                          13,188          13,188          13,188
Share based payments reserve                                           382             137             229
Share premium account                                               21,471          21,384          21,458
Profit and loss account                                           (30,906)        (28,419)        (28,719)

Shareholders' funds                                                  7,935          10,061           9,954




The financial statements were approved by the board of directors and signed on
their behalf on

26 September 2006.





A. Dickson

Director



Consolidated cash flow statement
For the six months ended 30 June 2006


                                                 NOTES            6 months      6 months       12 Months
                                                                     to 30     to 30 Jun       to 31 Dec
                                                                    Jun 06            05              05
                                                                              (restated)      (restated)
                                                                     £'000         £'000           £'000

Net cash inflow from operating activities          4                 1,189           431              32

Return on investments and serving of finance
Interest received                                                       10            17              36

Tax credit                                                             (3)          (47)            (44)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                    (147)         (129)           (454)
Sale of current asset investment                                        32             -               -
Purchase of intangible assets                                        (162)             -            (44)

                                                                     (277)         (129)           (498)


Net cash inflow before financing                                       919           272           (474)

Financing
Issue of ordinary share capital                                         16           178             279
Capital element of finance lease rentals                              (43)           (8)            (15)
Repayment of loan notes                                               (23)          (23)            (45)

                                                                      (50)           147             219

Increase in cash                                                       869           419           (255)





Notes to the financial statements for the six months to June 2006



1.         BASIS OF PREPARATION



The interim report should be read in conjunction with the statutory accounts for
the year ended 31 December 2005.  The interim figures have been prepared on the
same basis and applying the same accounting policies as in prior periods, except
as stated below:



Share based payments



With affect from 1 January 2006, the Group adopted FRS 20 which deals with share
based payments.



Share option awards are granted by Deal Group Media Plc to group employees and
are satisfied by Deal Group Media Plc issuing shares to the employees on
exercise.



Where an award of Deal Group Media Plc Shares is made to a group employee by a
group entity, the employing entity has an obligation to issue Deal Group Media
Plc shares to the employee if the vesting conditions of the award are satisfied.
 The employing entity incurs a liability in respect of the share awards
recognised at fair value, revalued at each reporting date over the vesting
period and at the date of settlement.



During the six months to 30 June 2006, £153,000 was charged to the profit and
loss account in respect of equity settled transactions (2005: £89,000).  This
expense was based on the fair value of share based payment transactions when
contracted. All of the expense arose under employee share awards made within the
group's reward structures.  Comparative figures have been restated accordingly.



Fair values of share options/awards, measured at the date of the grant of the
option/award, are calculated using a binomial model methodology that is based on
the underlying assumptions of the Black-Scholes model.



2.         TAXATION



There are tax losses of approximately £7,364,000 to carry forward to use against
future profits of the same trade.  These losses represent a potential deferred
tax asset of approximately £2,209,000 at a corporation tax rate of 30%.  Of this
amount £1,724,000 was recognised at 31 December 2004.  After a review of the
forecasts and the recent performance of the group, the Directors feel it is
prudent to release £695,000 from the deferred tax asset.



An explanation of the tax position compared to the Group's reported results is
set out below:


                                                                  6 months        6 months       12 months
                                                                to 30 June      to 30 June       to 31 Dec
                                                                        06              05              05
                                                                                (restated)      (restated)
                                                                     £'000           £'000           £'000

(Loss) / profit on ordinary activities before taxation             (1,491)              65           (494)

(Loss)/profit on ordinary activities before taxation
multiplied by corporation tax rate of 30%                            (447)              20           (148)

Effect of:
Amortisation of goodwill                                               173             173             345
Share based payments                                                    46              26           (359)
Deferred tax charge                                                  (695)
Other expenses not deductible                                            -              39              38
Surplus of depreciation compared to capital allowances                                                  46
Accumulated losses utilised in year                                                                   (29)
Other differences                                                                                        3
Losses carried forward to be offset against future
taxable trading profit                                                 228               -             104

Current tax charge for the period                                    (695)             258               -




3.         LOSS PER SHARE



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



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


                                                                6 months         6 months        12 months
                                                                               (restated)       (restated)
                                                            to 30 Jun 06     to 30 Jun 05     to 31 Dec 05

Loss on ordinary activities after tax (£'000)                    (2,186)            (193)            (494)

Weighted average number of shares                            380,029,031      374,072,594      376,573,277

Amount of loss per share in pence                                 (0.58)           (0.05)           (0.13)




In view of the losses, options in issue have an antidilutive effect.



4.         NET CASH FLOW FROM OPERATING ACTIVITES


                                                                  6 months        6 months       12 months
                                                              to 30 Jun 06    to 30 Jun 05   to 31 Dec  05
                                                                                (restated)      (restated)
                                                                     £'000           £'000           £'000


Operating (loss) / profit                                          (1,501)              48           (530)

Depreciation                                                           187             139             292
Amortisation                                                           575             575           1,149
Share based payments                                                   153              89             181
Loss on sale of fixed assets                                            43               -              13
Decrease / (increase) in debtors                                       462           (486)         (1,399)
Increase in creditors and provisions                                 1,270              66             326

Net cash flow from operating activities                              1,189             431              32




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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