23rd Sep 2005 14:45
Deal Group Media PLC23 September 2005 Press Release 23 September 2005 Deal Group Media plc ("dgm" or "the Company") Trading statement The Company expects that its profit before tax for the year to 31 December 2005will show no increase on the same period last year and will therefore fallsignificantly short of market expectations. The primary reason for this is that there has been a fundamental change in theterms of trade with a major long-standing client in response to external factorswithin its own industry. This particular client accounted for some 30% of highmargin gross profit. The Company was informed of this change of terms at ameeting yesterday afternoon, 22 September 2005. The impact is exacerbated bythe seasonality of the client's business which is weighted towards Christmassales. The key change in terms of trade relates to the methodology that the client usesto recognise a sale introduced by dgm's affiliate network. dgm continues totrade with the client, albeit on a much reduced basis, and will be less relianton any single client for revenues or profit going forward. Two other issues contributed marginally to the shortfall indicated above. Asupplier of advertising space has decided to market directly to advertisers and,secondly, the conversion time of new leads to sales across the Company isslightly behind expectations. Adrian Moss, Chief Executive, said: "It is very disappointing to lose revenueand contribution to profit, but the cause is client specific rather than a flawin the overall business model, which remains robust and cash generative.Excluding this specific revenue loss, sales continue to grow. "The Company has augmented the management team recently with additional highcalibre executives and the business continues to be driven forward. Theimplementation of dgmPro, the Company's new proprietary tracking technology,remains on target and is an extremely important step forward for the Company. "We are confident of maintaining our position as the UK's leading onlinemarketing group in a marketplace that is seeing year-on-year growth." - Ends - For further information, please contact: Media enquiries:Abchurch CommunicationsAriane Comstive / Julian Bosdet Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Enquiries:Deal Group Media plcAdrian Moss, Chief Executive Tel: + 44 (0) 20 7691 1880Andrew Dickson, Finance Director www.dealgroupmediaplc.com Panmure Gordon & CoRichard Swindells Tel: +44 (0) 20 7459 [email protected] www.panmure.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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