GlobalData Regulatory News (DATA)

5 Dec 2007 07:00

Date: 5 December 2007

On behalf of: TMN Group plc ("TMN" or "the Group")

Embargoed until: 0700hrs

TMN Group plc

Interim Results

TMN Group plc (AIM: TMN), the UK's premier online direct marketing group, is pleased to announce its interim results for the six months ended 31 October 2007.

Highlights - Revenue increased by 13% to ‚£9 million (H1 2006: ‚£8 million) - Headline profit before tax increased by 4%, which was achieved after a planned ‚£500,000 investment in new staff during the period - October was a record month for the Group, with revenue comfortably exceeding ‚£2 million - iD Factor, the research division, showed 200% year-on-year growth in revenue in October - Peter Harkness appointed as Chairman - Post period end all divisions are continuing to demonstrate strong growth

Commenting on the results, Mark Smith, CEO said:

"We have had a good first half of the year, which has continued to gain momentum as we move into a strong second half of the year. During the first six months we invested in new staff and continued to develop and deliver new products, such as Pure Lead and Envoy, which are expected to underpin growth across the divisions.

"We remain well positioned to meet the Board's expectations for the full yeargiven our performance in the first half and a strong start to the second half of the year."- ends -Enquiries to:TMNMark Smith, CEO 020 7440 9310Craig Dixon, CFO Redleaf CommunicationsSamantha Robbins / Anna Dunkin 020 7822 0200

cHAIRMAN'S STATEMENT

I am delighted to present the first set of interim results under myChairmanship. This has been a very positive half year for the Group, duringwhich we invested significantly in developing the business and subsequentlyreaped the benefits of that policy when we finished the period with a recordtrading month. We are well positioned to achieve the goals we have set for thesecond half, with trading in the initial weeks of the second half maintainingthe momentum we have developed.

Our trading highlights for the half year were:

- October was a record month with revenue comfortably exceeding ‚£2m. Total sales for the period were ‚£9m, up nearly 13% on last year. - Over ‚£500,000 was invested in new staff in the first six months, in line with our expectations, yet headline PBT grew 4% to ‚£1.43m. - Our research division is repaying the investment and management attention by showing a 200% year-on-year growth in October. - Post period-end, all divisions are continuing to demonstrate strong growthYour Board has a policy of targeting significant organic growth, and we needto ensure those sales are sustainable. As stated in our last trading up-date,it was considered vital that staff numbers and skills levels should beenhanced to support our trading ambitions. Ensuring that the Group continuesto hire and develop the very best staff is vital and the Board believes thatits forward-looking staffing policy will enable it, in future, tosignificantly off-set the negative effect which is being felt by manybusinesses in the sector.

Operational Overview

The market in which the Group operates continues to grow, with the IAB (Internet Advertising Bureau) recently reporting that over 32 million people have used the internet in the 12 months to 30 June 2007, and advertisers spending over ‚£1.3bn on internet advertising in the first half of this year.

Clearly, this puts the advertising divisions of the Group - TMN Media and EDR- in the right place. Likewise, market research companies looking to get theirsurveys completed by a wide selection of users are turning to the internet,with over 15% of all surveys now completed online, suiting another side of ourbusiness, the iD Factor. All aspects of the business are well positioned tocontinue to flourish, with recent reports from ZenithOptimedia suggesting thatglobal online advertising will increase by a further 28% in 2008, and 69% overthe next three years to 2010.Clearly, this puts TMN in an enviable position. Resources and investment havebeen freed up to ensure that the infrastructure is in place to handlecontinued growth. The Group continues to evolve, with performance emphasisfalling into the second half, when Christmas and Easter will prove drivers ofincreased advertising spend in our email and website sectors. The researchdivisions further benefit from increased activity in the first quarter of thecalendar year, with a number of new clients signing up to long-term"trackers".

Financial highlights and comparative figures are shown below:

Headline results* Reported results 6 months to 6 months to 6 months to 6 months 31/10/2007 31/10/2006 31/10/2007 to Change 31/10/2006 (restated) ‚£'000 ‚£'000 % ‚£'000 ‚£'000 Revenue 8,993 7,981 13% 8,993 7,981 Profit Before Tax 1,428 1,377 4% 1,246 1,195 Basic EPS (pence) 2.2p 2.4p 2.0p 2.1p

Diluted EPS (pence) 2.2p 2.3p 1.9p 2.0p

*Headline PBT excludes the impact of amortisation of acquired intangible assets. For the six months ended 31 October 2007 such amortisation reduced PBT and PAT by ‚£182,000 (2006: ‚£187,000) and ‚£127,000 (2006: ‚£127,000) respectively. Note 3 of the Interim Report shows the effect of restatement relating to intangible asset amortisation.

Divisional Income Statement 6 months to 6 months to Growth 31/10/07 31/10/06 ‚£'000 ‚£'000 TMN Media Turnover 4,369 4,238 3.1%Gross profit 3,020 2,849Gross profit % 69.1% 67.2% EDR Agency Turnover 3,437 2,867 19.9%Gross profit 1,063 858Gross profit % 30.9% 29.9% Research Divisions Turnover 1,187 876 35.5%Gross profit 753 577Gross profit % 63.4% 65.9% Within the divisions there have been significant achievements. EDR's leadmanagement tool, Pure Lead, is producing powerful growth. The number of leadshandled by the system has grown over 10-fold since launch in July, dealingwith hundreds of thousands of leads each month. Pure Lead is quickly becomingthe market-leading lead management tool, able to cleanse, verify and dedupeleads generated by publishers, giving our clients better data quality andincreased visibility on where to purchase the best leads.Within TMN Media, the Plum Offers site is helping deliver a stronger combinedecommerce revenue stream, contributing to a record performance of our websitesin November. Looking to the future, our email distribution platform, Envoy islaunching in the New Year. It is performing strongly in the beta launch phase,with a number of clients having migrated across to it.

The Group is almost unrecognisable, particularly in terms of products and financial scale, from the business founded nine years ago. The Group has been extremely successful in integrating all previous acquisitions and the Board believes the Group can make a significant gain from further strategic acquisitions.

The Group is continuing to change at all levels. During the trading period ourChairman of the last three years, Warren Tayler, decided to retire from theBoard. Warren's stewardship and leadership has been crucial in the creation ofthe TMN Group of today from its former constituent parts, and he leaves abusiness which is fit for purpose and will continue to enjoy the sort ofgrowth which he has overseen in the past. The Board is unanimous in itsadmiration for what he has achieved and in its gratitude for his counsel andleadership. I succeeded him as Chairman a few days ago and feel privileged tobe the inheritor of his good work.Harold Gittlemon, one of our non-executive directors, has decided to step downfrom the Board. Harold has helped to guide the Group to its position today andthe Board would like to put on record its thanks to Harold and to wish him allthe best in the future.What I have seen of the people and products in the Group since I joined the Boardas a non-executive director in August gives me great confidence that the sales momentum seen in the last few months will continue to build in the second half. All of our businesses are performing well and now we have increased our investment

in talented staff we can capitalise on the opportunities we have identified for new

product development and expansion both in the UK and internationally.

The market in which the Group operates continues to grow, with the IAB(Internet Advertising Bureau) recently reporting that over 32 million peoplehave used the internet in the 12 months to 30 June 2007, and advertisersspending over ‚£1.3bn on internet advertising in the first half of this year.Clearly, this puts the advertising divisions of the Group - TMN Media and EDR- in the right place. Likewise, market research companies looking to get theirsurveys completed by a wide selection of users are turning to the internetwith over 15% of all surveys now completed online, suiting another side of ourbusiness, the iD Factor. All aspects of the business are well positioned tocontinue to flourish, with recent reports from ZenithOptimedia suggesting thatglobal online advertising will increase by a further 28% in 2008, and 69% overthe next three years to 2010.This puts the Group in an enviable position. Resources and investment have beenfreed up to ensure that the infrastructure is in place to handle continued growth.The Group continues to evolve, with performance emphasis falling into the second half, when Christmas and Easter will prove drivers of increased advertising spend in our email and website sectors. The research divisions further benefit from increased activity in the first quarter of the calendar year, with a number of new clients signingup to long-term "trackers".

The Board is confident that this will be another successful year for the Group, both

financially and operationally.

Peter HarknessChairmanCONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Year 6 months 6 months ended ended ended 30 April 31 October 31 October 2007 2006 2007 Unaudited Unaudited Audited Restated Restated Note ‚£'000 ‚£'000 ‚£'000 Revenue 8,993 7,981 16,095 Cost of sales (4,157) (3,697) (7,015) Gross profit 4,836 4,284 9,080 Administrative expenses (3,619) (3,093) (6,173) Operating profit 1,217 1,191 2,907 Interest on bank deposits 29 4 18

Interest payable and similar charges - -

(7)

Profit on ordinary activities before tax 1,246 1,195 2,918 Tax (254) (155) (449) Profit on ordinary activities after tax 992 1,040 2,469 Earnings per share Basic (pence) 2 2.0p 2.1p 5.0p Diluted (pence) 2 1.9p 2.0p 4.7p

All amounts relate to continuing operations.

CONSOLIDATED BALANCE SHEETAT 31 OCTOBER 2007 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Restated Restated ‚£'000 ‚£'000 ‚£'000Non-current assetsGoodwill 6,361 6,542 6,359Other intangible assets 1,319 1,380 1,289Property, plant and equipment 199 154 147 7,879 8,076 7,795 Current assetsTrade and other receivables 6,433 4,184 4,533Cash and cash equivalents 1,040 1,070 1,551 7,473 5,254 6,084 Total assets 15,352 13,330 13,879 Current liabilitiesTrade and other payables 3,601 2,880 2,663Current tax 379 469 381Deferred tax 32 110 60Provisions 465 679 447 4,477 4,138 3,551 Non-current liabilitiesProvisions - 400 400Deferred tax 136 193 162 136 593 562 Total liabilities 4,613 4,731 4,113 Net assets 10,739 8,599 9,766 EQUITYCalled up share capital 105 105 105Share premium account 6,215 5,809 5,809Equity shares to be issued 356 874 687Share option reserve 441 411 426Other reserves 121 121 121Retained earnings 3,501 1,279 2,618 Total equity 10,739 8,599 9,766

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 31 OCTOBER 2007

6 months Year ended 6 months ended 31 October ended 2007 30 April 31 October 2006 2007 Unaudited Unaudited Audited Restated Restated ‚£'000 ‚£'000 ‚£'000

Cash flows from operating activities

Profit after tax 992 1,040 2,469 Adjustments for: Depreciation 53 47 102Amortisation 423 373 764Interest receivable (29) (4) (18)Interest expense - - 7

Taxation expense recognised in income 254 155

449statementShare based payments expense 15 14 29(Increase) in receivables (1,899) (842) (1,191)

(Decrease)/ increase in payables 935 76

(133)

(Decrease)/ increase in provisions (82) 92

(149)

Cash generated from operations 662 951

2,329 Interest paid - - (7)Tax paid (311) (275) (735)

Net cash generated from operating 351 676

1,587

activities

Cash flows from investing activities

Interest received 29 4

18

Purchases of plant, property and (103) (103)

(152)

equipment

Purchases of other intangibles (453) (177)

(477)

Acquisition of subsidiaries - deferred (200) (194)

(198)

consideration paidAcquisition of subsidiaries - loan note (100) -

-

repaid

Net cash (used in)/from investing (827) (470)

(809)activities Financing activities

Proceeds on issue of shares - share 74 139

139

options exercisedPurchase of own shares (109) (496)

(1,350)

Proceeds from share re-organisation - -

763

Net cash (used in) financing activities (35) (357)

(448)

Net increase / (decrease) in cash and (511) (151)

330

cash equivalents

Cash and cash equivalents at the 1,551 1,221

1,221

beginning of the period

Cash and cash equivalents at the end of 1,040 1,070

1,551the period CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Called Share Equity Share up share Premium shares to be option Other Retained capital account issued reserve reserves earnings ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 At 1 May 2006 105 4,702 2,419 397 121 736 8,224restatedIssue of - 968 (968) - - - -sharesShare options - 139 - - - - 139exercisedIDF deferred - - (764) - - - (764)considerationPurchase of - - - - - (1,350) (1,350)own sharesNet income - - - - - 763 763recogniseddirectly inequityRetained - - - - - 2,469 2,725profitShare-based - - - 29 - - 29payment At 1 May 2007 105 5,809 687 426 121 2,618 9,766restatedIssue of - 331 (331) - - - -sharesShare buyback - - - - - (109) (109)Share options - 75 - - - - 75exercisedRetained - - - - - 992 992profitShare-based - - - 15 - - 15payment At 31 October 105 6,215 356 441 121 3,501 10,7392007

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 OCTOBER 2007

1. Basis of preparation

These interim condensed consolidated financial statements are for the sixmonths ended 31 October 2007. They have been prepared in accordance with IAS34 "Interim Financial Reporting" This is now the Group's second year ofreporting under IFRS and the comparative information is therefore taken fromfinancial information previously reported under IFRS.

These financial statements have been prepared under the historical cost convention.

These consolidated interim financial statements have been prepared inaccordance with the accounting policies used in the year ended 30 April 2007which are based on the recognition and measurement principles of IFRS in issueas adopted by the European Union (EU). An exception to this is an expandedpolicy in relation to intangible fixed assets to accommodate the categories ofasset not previously recognised. The amended amortisation rates, all of whichare on a straight line basis, by class of assets are as follows:

Databases - over 2 years

Customer related intangibles - between 4 and 6 years

Proprietary software - over 2 years

Nature of operations and general information

TMN Group plc and subsidiaries' ('the Group') principal activities include the provision of online direct marketing and market research services.

TMN Group plc is the Group's ultimate parent company. It is incorporated anddomiciled in Great Britain. The address of TMN Group plc's registered office,which is also its principal place of business, is 69-73 Theobalds Road,London, WC1X 8TA. TMN Group plc's shares are listed on the AlternativeInvestment Market of the London Stock Exchange.

TMN Group plc's consolidated interim financial statements are presented in Pounds Sterling (‚£), which is also the functional currency of the parent company.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on 4 December 2007.

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 30 April 2007, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.

2. Earnings per share

The calculation of earnings per share is based on the following profits andnumber of shares: 6 months ended 6 months ended Year ended 31 October 2007 31 October 2006 30 April 2007 (Restated) (Restated) Number of Pence Number Pence Number Pence shares per of per of per Profit share Profit shares share Profit shares share ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Basic earnings per 992 50,309 2.0 1,040 49,326 2.1 2,469 49,646 5.0share Dilutive effect ofsecurities:Share options - 1,530 - - 1,832 - - 2,144 -Deferredconsideration to besettled in shares - - - - 450 - - 934 - Diluted earnings 992 51,839 1.9 1,040 51,608 2.0 2,469 52,724 4.7per share 3. Prior year adjustments

The Board has undertaken a review of the accounting for transition to IFRS as reported in the Group's first full IFRS financial statements for the year ended 30 April 2007 and two issues have arisen which require restatement as follows:

Classification of share based deferred consideration

During the year ended 30 April 2006 the Group acquired Electronic DirectResponse Limited, for which a part of the consideration was deferred andpayable in shares or under share options. The numbers of shares or options tobe issued at future dates were fixed and should therefore have been classifiedas equity rather than debt.

Intangible assets on acquisition

On acquisition of Electronic Direct Response Limited in November 2005 goodwillon consolidation amounting to ‚£5.76 million was acquired. In the Group's firstIFRS accounts for the year ended 30 April 2006 the assessment of theintangible fixed assets acquired in this business combination was omitted. TheGroup estimates that goodwill was therefore overstated by ‚£942,000, being thenet of the acquired intangibles of ‚£1.34 million and the related deferred taxliability of ‚£403,000. The intangible assets acquired were databases, customerrelated intangibles and proprietary software.

The combined financial effects of the above restatements are shown in the following tables:

Effect of prior year restatement - year ended 30 April 2007

Consolidated Balance Sheet As Effect ofExtracts: originally restatement As stated restated ‚£'000 ‚£'000 ‚£'000Non-current assetsGoodwill 7,300 (941) 6,359Other intangible assets 461 828 1,289Current assetsDeferred tax asset 26 (26) -Current liabilitiesDeferred tax - (60) (60)Provisions (956) 509 (447)Non-current liabilitiesDeferred tax - (162) (162)Provisions (934) 534 (400)EquityShare option reserve 70 355 426Shares to be issued - 688 687Retained earnings 2,979 (361) 2,618Total equity 9,084 682 9,766 Consolidated Income Statement Extracts:Administrative expenses (5,808) (365) (6,173)Tax (558) 109 (449)Profit after tax 2,725 (256) 2,469

Effect of prior year restatement - 6 months ended 31 October 2006

Consolidated Balance Sheet As Effect ofExtracts: originally restatement As stated restated ‚£'000 ‚£'000 ‚£'000Non-current assetsGoodwill 7,483 (941) 6,542Other intangible assets 369 1,011 1,380Current liabilitiesDeferred tax - (110) (110)Provisions (1,188) 509 (679)Non-current liabilitiesDeferred tax - (193) (193)Provisions (1,122) 722 (400)EquityShare option reserve 55 355 411Shares to be issued - 876 874Retained earnings 1,512 (233) 1,279Total equity 7,601 998 8,599 Consolidated Income Statement Extracts:Administrative expenses (2,911) (182) (3,093)Tax (210) 55 (155)Profit after tax 1,167 (127) 1,0404. Dividend

The Group does not intend to pay a dividend at this time.