GlobalData Regulatory News (DATA)

1 August 2011

Progressive Digital Media Group Plc

Unaudited Interim Report For The Six Months Ended 30 June 2011

Progressive Digital Media Group Plc (the "Business" or the "Group") produces premium business information, research services and marketing solutions for senior level decision makers.

Highlights

Financial performance

·; Group revenues up 11.6% to £27.7m (2010: £24.8m)

·; EBITDA(1) up 54.2% to £3.7m (2010: £2.4m)

·; Adjusted EBITDA(2) up 51.6% £4.2m (2010: £2.7m)

·; Business Information revenue streams delivering double digit growth

Key achievements in the six months

·; Strong growth across a broad range of metrics including revenue, operating margins and earnings

·; Continued investment in our content, our delivery platforms and our sales footprints

·; Canadean performing well

·; Continued focus on annualised and must have products

·; Good momentum, with full year results expected to deliver a solid base for future growth

Strengthened management team

In August Mark Meek will join as CEO and Stephen Bradley as Finance Director. Both have long, well established track records within the Business Information sector and the appointments strengthen our experienced management team.

Simon Pyper, CEO of Progressive Digital Media Group plc, commented:

"The Group has performed well, delivering improvements in revenue, operating margins and earnings. Moreover, that these results have been achieved at time of investment and change for the Group and against the backdrop of the economic environment is cause for some satisfaction. The business today is markedly different from that which was formed some two years ago and will grow further in the next two years as we realise the anticipated benefits from our investment in our Business Information products, digital platforms and increased sales footprint. We have made a good start and I believe the Group is well placed to deliver upon its strategy of delivering long term profitable growth."

Note 1 EBITDA: Earnings before interest, tax, depreciation and amortisation. Includes a charge of £0.4m for share based payment (2010: Nil).

Note 2: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, adjusted for share based payments, derivatives and restructure/ integration costs associated with acquisitions.

Enquiries:

Progressive Digital Media Group plc 020 7936 6400

Mike Danson, Chairman

Simon Pyper, CEO

Investec Investment Banking, NOMAD and Broker 020 7597 4000

David Currie

David Flin

Hudson Sandler 020 7796 4133

Michael SandlerProgressive Digital Media Group plc

We are pleased to announce our results for the six months ended 30 June 2011.

CEO's statement

The Group has performed well, delivering improvements in revenue, operating margins and earnings. Moreover, that these results have been achieved at time of investment and change for the Group and against the backdrop of the economic environment is cause for some satisfaction. The business today is markedly different from that which was formed some two years ago and will grow further in the next two years as we realise the anticipated benefits from our investment in our Business Information products, digital platforms and increased sales footprint. We have made a good start and I believe the Group is well placed to deliver upon its strategy of delivering long term profitable growth.

Group performance

Strong growth was achieved across a number of revenue streams and Group revenues increased by 11.6% to £27.7m (2010: £24.8m).

Adjusted EBITDA grew 51.6% to £4.2m (2010: £2.7m), with Adjusted EBITDA margin increasing by 3.9% to 15.0% (2010: 11.1%) reflecting the growth in Business Information and Web based revenues. Over the longer term, and as our investment reduces to more normalised levels, we would expect further margin improvement.

Profit before tax increased by £3.5m to £1.4m (2010: Loss £2.1m), which is after a £0.4m non-cash charge for share based payments following the introduction in January 2011 of the long-term incentive plan for senior management (2010: Nil).

Financial Review of Operations

Business Information

Business Information, which includes our Business Information, B2B and Web platforms accounts for almost 87% of Group revenues and 90% of earnings, is performing well.

·; Revenues for the six month period were £24.0 million (2010: £20.1 million), which represents growth of 19.4%.

·; Direct Contribution of £8.3 million (2010: £7.7 million) which is post significant investment in new product development.

Digital Marketing

Direct Contribution marginally declined following a change in the technology platform and a deliberate change of revenue mix focusing on higher margin product providing innovative, online digital marketing. The market for Digital Marketing remains highly competitive.

·; Revenues for the six month period were £3.7 million (2010: £4.7 million)

·; Direct Contribution of £1.0 million (2010: £1.1 million)

Note: Direct Contribution is Adjusted EBITDA before Central Overheads.

Board changes

Effective from 1 August, Mark Meek will be appointed as CEO and Stephen Bradley as Finance Director. Both Mark and Stephen have previously worked with Mike Danson (Chairman of Progressive Digital Media Group) and me and have long, well established track records within the Business Information sector.

As Managing Director I will be responsible for strategy, Group wide projects (including acquisitions) and external relations.

Rob Marcus (Finance Director) will be resigning from the Board and will be leaving the Group later this year. The Board and I would like to thank Rob for his hard work and contribution and wish him the very best for the future.

These Board changes ensure that the Group has sufficient management depth and experience in the Business Information sector to better execute its strategic and operational plans.

Financial review

The Group's statement of its financial position at 30 June 2011 details our short-term borrowings, which consist of the Group's overdraft (2011: £4.6m, 2010: £6.0m) and the outstanding amount on the loan that funded the Canadean acquisition (2011: £8.7m, 2010: nil). At this date the Group had £9.8 million (2010: £9.8 million) of long-term borrowings that consist of a subordinated interest free loan provided by Michael Danson, which is repayable by 2019 and is not expected to be repaid in the next twelve months. In addition to the existing facility, Mr Danson provided the Group with a £2.0 million working capital loan at the time of the reverse acquisition of Progressive Digital Media. This loan has not yet been drawn upon.

The Group has prepared the accounts on a going concern basis and, based on current forecasts, the Group will meet its day-to-day working capital requirements from operating cash flows and existing banking facilities.

Outlook and prospects

We have had a good first half with revenue growth ahead of both our budget and prior year comparatives. Whilst we recognise that the economic climate remains uncertain, we are confident that we will continue to benefit from our investment in our people, our products and our delivery platforms.

The Board believes significant progress has been made to date and is confident of the long-term profitable prospects of the Group. These results do not as yet fully reflect the expected benefits from the investment we have made in our products, our people and our processes. They do however represent a culmination of a lot of hard work from our employees and are clearly a step in the right direction.

Simon Pyper

Chief Executive

1 August 2011

Consolidated income statement

The accompanying notes form an integral part of this financial report.

1. EBITDA is defined as operating profit plus depreciation, amortisation and impairment of assets. We define Adjusted EBITDA as EBITDA adjusted for costs associated with acquisitions and restructure of the Group, share based payments and the impact of foreign exchange contracts. All adjusting items are disclosed individually in note 4 of these interim financial statements. We present Adjusted EBITDA as additional information because we understand that it is a measure used by certain investors. However, other companies may present Adjusted EBITDA differently than we do. EBITDA and Adjusted EBITDA are not measures of financial performance under IFRS and should not be considered as an alternative to operating profit or loss, or as a measure of liquidity, or an alternative to profit or loss for the period as indicators of our operating performance, or any other measure of performance derived in accordance with IFRS.

Consolidated statement of comprehensive income

The accompanying notes form an integral part of this financial report.

Consolidated statement of financial position

The accompanying notes form an integral part of this financial report.

Consolidated statement of changes in equity (unaudited)

The accompanying notes form an integral part of this financial report.

Consolidated statement of cash flows

The accompanying notes form an integral part of this financial report.

Notes to the interim financial statements

1. General information

Nature of operations

Progressive Digital Media Group plc and its subsidiaries (together 'the Group') principal activity is the provision of premium business information, research services and marketing solutions for senior level decision makers. Refer to note 3 for further information about the Group's operating segments.

Progressive Digital Media Group plc ('the Company') is a company incorporated in the United Kingdom and listed on the Alternative Investment Market (AIM). The registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the Company is 3925319.

Basis of preparation

These interim financial statements are for the six months ended 30 June 2011. They have been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with Progressive Digital Media Group plc's audited financial statements for the year ended 31 December 2010.

The financial information for the year ended 31 December 2010 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006.

These interim financial statements have been prepared under the historical cost convention as modified by the revaluation of derivative financial instruments. These interim financial statements have been prepared in accordance with the accounting policies detailed in the Group's financial statements for the year ended 31 December 2010. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.

The interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the Company. These interim financial statements have been approved for issue by the board of directors.

Critical accounting estimates and judgements

The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period relate to property provisions, valuation of acquired intangible assets, provisions for bad debt, share based payments and the carrying value of goodwill and other intangibles in the statement of financial position.

Notes to the interim financial statements (continued)

Going concern

The Group meets its day-to-day working capital requirements from an overdraft facility of £7.0 million of which £4.6 million was utilised as at 30 June 2011. Based on cash flow projections the Group considers the existing financing facilities to be adequate to meet short-term commitments. There are no covenants associated with the overdraft and no restrictions on the long-term borrowing.

The Group has two loans from the Chairman and majority shareholder, Michael Danson. An interest free loan of £9.8 million is repayable by 2019 or at the demand of Michael Danson. The Group has received a written undertaking that Michael Danson will not demand repayment of this loan for a period of 12 months from the date of approval of the interim financial statements.

The second loan is for £9 million and was used to fund the acquisition of Canadean. £8.7 million is outstanding at 30 June 2011. Repayments on the loan will only be made to the extent that the Group has sufficient forecast working capital to meet all of its liabilities.

In addition to the existing facility Michael Danson provided the Group with a £2 million working capital loan in June 2009. This loan has not yet been drawn upon and is not forecast to be drawn upon.

The Group's overdraft facility is on an on demand basis. The Group has prepared the accounts on a going concern basis on the assumption that this facility is available. In the event of the overdraft facility not being available, the Group is confident that it can obtain suitable short-term financing.

Restatement of comparatives

Certain comparatives have been restated due to errors in the treatment of the fair value of the cost of the business combination with TMN Group (TMN) and the premium arising on the reverse acquisition of the Company on 25 June 2009.

The cost of the combination had been disclosed as being calculated based on the fair value of TMN before the combination, using the TMN share price before suspension from AIM in February 2009. However, IFRS 3 requires the fair value of the cost of the combination to be calculated based on the fair value of the legal subsidiary on the date of the exchange. The revised cost of the combination is £6,127,000 giving rise to an increase in the value of goodwill attributed to the TMN acquisition of £2,344,000 and an associated adjustment to other reserve.

Share premium had been calculated using the number of shares of TMN before the consideration issue and the pre-suspension share price. The calculation should have used the number of shares issued valued at the share price on the date of exchange. Management have recalculated share premium based on the share price on the date of the exchange which leads to an increase in share premium of £31,275,000 with a corresponding decrease in the value of the other reserve that arises upon the reserve acquisition.

The impact of this restatement is shown below:

The restatement was reflected in the Group's statutory financial statements for the year ended 31 December 2010 and as such the 31 December 2010 comparatives are unchanged from those previously reported.

Notes to the interim financial statements (continued)

2. Accounting policies

This interim report has been prepared based on the accounting policies detailed in the Group's financial statements for the year ended 31 December 2010 and the following additional policy.

Share-based compensation

The Group operates a share-based compensation plan which is equity settled (see note 7 for details). The fair value of the employee services received in exchange for the grant of equity instruments is recognised as an expense with a corresponding entry in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the equity instruments granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of equity instruments that are expected to become exercisable. At each balance sheet date, the Group revises its estimates of the number of equity instruments that are expected to become exercisable. The Group recognises the impact of the revision of original estimates, if any, in the income statement.

3. Segment analysis

Segment contribution is reported to the Board (which is considered to be the Group's chief operating decision maker) on a monthly basis and consists of earnings before interest, tax, depreciation, amortisation, central overheads and other adjusting items. The Group considers the business from a divisional perspective (Business Information and Digital Marketing).

Changes in segments

During 2010 the research business of TMN Group was restructured and combined with the Progressive business unit to form the segment Business Information. The remaining business of TMN Group now forms a new division called Digital Marketing. Canadean, which was acquired on 1 September 2010, was integrated into Business Information. Segmental results for the six months to 30 June 2010 have been restated accordingly.

Business Information

Business Information delivers premium business information, research services and marketing solutions for senior level decision makers.

Digital Marketing

Digital Marketing provides online marketing and lead generation.

Notes to the interim financial statements (continued)

3. Segment analysis (continued)

Six months to 30 June 2011

Six months to 30 June 2010 - Restated

Year to 31 December 2010

Unallocated central overheads consists of corporate, HR, finance, IT and facilities expenses.

Notes to the interim financial statements (continued)

4. Other expenses

5. Intangible assets

The following table shows the significant additions and disposals to intangible assets.

6. Financing

As at 30 June 2011 the Group had net debt of £22.7 million. The principle source of financing for working capital requirements is an overdraft facility of £7.0 million of which £4.6 million was utilised as at 30 June 2011.

Long-term borrowings of £9.8 million consist of a loan provided by Michael Danson that is repayable by 2019 (refer note 1).

Short term borrowings include a £9.0 million loan provided by Michael Danson to fund the acquisition of Canadean, which has £8.7 million outstanding at 30 June 2011. Repayments on this loan will only be made to the extent that the Group has sufficient forecast working capital to meet all of its liabilities.

Notes to the interim financial statements (continued)

7. Share based payments

The Group created a share option scheme during the year ended 31 December 2010 and granted the first options under the scheme on 1 January 2011 to certain senior employees. Each option converts to one ordinary share on exercise. A participant may exercise their options (subject to employment conditions) at any time during a prescribed period from the vest date to the date the option lapses. For these options to be exercised the Group's earnings before interest, taxation, depreciation and amortisation, as adjusted by the Remuneration Committee for significant or one-off occurrences, must exceed certain targets.

The total charge recognised for the scheme during the six months to 30 June 2011 was £374,000. The awards of the scheme are settled with ordinary shares of the Company. No options were exercised during the six months to 30 June 2011.

Information regarding options granted under the share option scheme is as follows:

The following table summarises the Group's share options outstanding at 30 June 2011:

No options are currently exercisable.

8. Related party transactions

Michael Danson, Progressive Digital Media Group's Chairman, owns 83.9% of the Company's ordinary shares as at 30 June 2011. Michael Danson owns a number of businesses that interact with Progressive Digital Media Group. The principal transactions are as follows:

Accommodation

The Group has building leases with Estel Property Investments Limited and Estel Property Investments No. 3 Limited with a remaining period of 23 years and 9.5 years respectively. The buildings are also occupied by other businesses that are owned by Michael Danson. The Group recharges rental expenses to these companies based on the proportional occupancy of the buildings. The total rental expense in relation to the buildings owned by Estel Property Investments and Estel Property Investments No. 3 Limited for the six months to 30 June 2011 was £949,969 net of a recharge of £201,940 to the other companies occupying the buildings.

Notes to the interim financial statements (continued)

8. Related party transactions (continued)

Corporate support services

Corporate support services are provided to the other companies owned by Michael Danson, principally finance, human resources, IT and facilities management. These are recharged to companies that consume these services based on specific drivers of costs, such as proportional occupancy of buildings for facilities management, headcount for human resources services, revenue or gross profit for finance services and headcount for IT services. The recharge made from the Group to these companies for the six months to 30 June 2011 was £630,928.

Loans

Michael Danson has provided loans to the Group during the periods presented (see note 1 and 6). This includes:

·; A £9.8 million loan issued in 2009 and repayable by 2019 which does not carry interest.

·; A £9 million loan for the Canadean acquisition, repayable by 2013, or earlier subject to Board approval. This loan accrues interest at a rate of 275 basis points over the 3 month London Interbank Offered Rate, in line with the current rate on the Group's bank overdraft facility. A repayment of £0.5 million was made during the year to 31 December 2010.

Details and Advisors

Company Secretary

Rob Marcus

Head Office and Registered Office

John Carpenter House

John Carpenter Street

London EC4Y 0AN

Tel: + 44 (0) 20 7936 6400

Nominated Adviser and Broker

Investec Bank plc

2 Gresham Street

London EC2V 7QP

Solicitors

Foot Anstey

Salt Quay House

Sutton Harbour

Plymouth PL4 0BN

Auditors

Grant Thornton UK LLP

Grant Thornton House

Melton Street

London NW1 2EP

Registrars

Capita Registrars Limited

Northern House

Woodsome Park

Fenay Bridge

Huddersfield

West Yorkshire HD8 0GA

Bankers

Lloyds TSB Bank plc

25 Gresham Street

London EC2V 7HN

Registered number

Company No. 3925319