20th Feb 2008 07:00
Media Corporation plc ("Media Corp" or the "Group") (AIM:MDC) Trading Update The Board of Media Corp is pleased to announce that the re-organisation andrestructuring of the Group that commenced following the US internet gambling banat the end of 2006 is now complete and the business is now organised into twodivisions: Internet Publishing and Advertising sales. Following a strategic review and analysis of the internet advertising market,the Board has approved a business plan to invest up to £1 million of itsexisting cash resources in expanding its businesses during 2008. The Group hadcash balances of £6.3 million at the financial year end, 30 September 2007 andthis may be enhanced by a further £0.625 million in March 2008 if the earn outprovisions relating to the Casino.co.uk sale are met. The Board believes this investment is essential to ensure that the Groupmaximises the opportunity presented by the unprecedented growth of the onlineadvertising sector. The change in strategy and investment needed in the nearterm will mean that although gross profit is still in line with marketexpectations net profit will be lower. However, it is anticipated thisinvestment will generate accelerated revenue and profit growth for the Groupgoing forward. Headcount in the advertising sales division is anticipated to increase to 40people (from the current 20 staff) by the end of 2008 as the Group broadens itscurrent offering to incorporate site representation, new display and videoadvertising formats. The majority of these new hires will be experiencedadvertising sales executives and sales support staff. In the publishing division, the Group's investment will be focused on buildingan experienced in-house editorial and technical team, and increasing third partycontent deals. This expansion is essential as the Group expands its currentoffering and launches its internet portals into new markets. The majority ofthis investment will be focused on enhancing our key portal assets which theboard believes have significant value in excess of the current marketcapitalisation. Justin Drummond, Chief Executive of Media Corp. commented: "The Group is operating in the fast growing internet advertising market which isestimated to have reached £3.4 Billion and accounted for 24.8% of all UK mediaspend in 2008. In 2009 Internet advertising spend is predicted to overtake TVadvertising" (source: Group M). "With the Group's significant cash resources of £6.3 million at the financialyear end, it is essential that we invest in seizing the significant opportunitypresented by the growth and potential of the online advertising market". For further information please contact: Media Corporation plcJustin Drummond, Chief Executive+44 (0)20 7618 9000 Buchanan CommunicationsCharles Ryland/Suzanne Brocks/Susanna Gale+44 (0)20 7466 5000 Canaccord Adams LimitedClayton Bush, Vice President+44 (0)20 7050 6500 Notes to editors: Listed on the AIM market of the London Stock Exchange, Media Corp is a leadinginternet media and advertising group focused on website publishing and onlineadvertising. www.mediacorpplc.com The Group has two principal divisions: Website Publishing - Media Corp has a diverse publishing division specialisingin online media. Our impressive portfolio of websites includes a number ofmarket leaders including www.gambling.com, www.onthebox.com www.sport.co.uk,www.creditcardexpert.co.uk and www.flightcomparison.co.uk. Online Advertising - Formed in 1996, Eyeconomy specialises in mass reachcampaigns to over 30 Million unique consumers per month via its own proprietaryad-serving and tracking technology for clients including AOL, Dell and AmericanExpress. www.eyeconomy.co.uk Copyright Business Wire 2008Related Shares:
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