Trading Update

The Mission Marketing Group plc

Trading Update

The Mission Marketing Group plc ('the missiontm` or 'the Group', AIM: TMMG), the national marketing communications and advertising group, today issued an update following the end of its interim period.

The first half of the year has been, as the curate might have said, good in parts.

The good being the way our Agencies have progressed, delivering outstanding work for their Clients and adding new business wins from the likes of Virgin Atlantic, RAC, Harley-Davidson, Samsung, Peugeot/Citroen Trade and Brittany Ferries, and the appointment of Bray Leino to the Government Procurement Service roster for both Direct Marketing and Digital Advertising. The Autumn 2012 purchase of Balloon Dog has been a great addition to our portfolio, as was the earlier acquisition of Yucca and the management teams and interaction between our Agencies has continued to develop thereby strengthening our concinnity strategy.

Other positive news stems from the growth of our PR and Digital businesses and the opening of our second Big Agency, in Birmingham, which is expected to make a real contribution later in the year and in the future. We are also in the process of opening up in San Francisco to support our growing April-Six IT specialist Agency and in the Far East to support a number of our existing Clients across a number of our Agencies.

Where the curate may feel that the egg has travelled to the face is from our purchase of the Addiction Agency. Whilst committed to the development of this Branded Content business given the strategic importance to the Group, the short term has proved costly to us due to poor management (now resolved) and the loss of their major Client, B&Q. It has been a challenging nine months but glad to report that we are now onto the right course. This, together with the impact from a £400m cost-saving programme announced by Aviva, has forced Bray Leino to restructure its London activities and, as a consequence, we expect to incur non-recurring charges and goodwill impairment charges of approximately £1.5m.

It is clear that Addiction will significantly impact on our first half results which are expected to show a lower level of profit than was achieved last year. However, given the great strides that our core business continues to make and our plans for the future, we remain confident that our business will continue to progress. We anticipate significant growth in the second half of the year and expect adjusted profit before tax for the year to be around £5m.

We have continued to maintain a strong approach to working capital management and we expect to report a further reduction in net debt from £12.3m at 31 December 2012 to approximately £9m at 30 June, and a reduction in the Group's leverage ratio (ratio of net debt to EBITDA) to below x1.5 at 30 June. Looking forward, the trends of reducing net debt, increasing headroom on our banking facilities and reducing leverage ratio are expected to continue and consequently it remains our intention to re-instate a dividend at the time of our Interim Results.

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the missiontm is a national marketing communications and advertising group with 17 offices across the UK. The Group specialises in providing national and international clients with award winning marketing, advertising and business communications. Group members include Addiction, April-Six, Balloon Dog, Big Communications, Bray Leino, RLA, Robson Brown, Story, ThinkBDW and Yucca. the missiontm employs over 800 staff nationally and is listed on AIM (TMMG).

www.themission.co.uk