Last checked at 15 Feb 2008 07:00
Date: 15 February 2008On behalf of: TMN Group plc ("TMN" or "the Group")Embargoed until: 0700hrs TMN Group plc Operational & Trading Update
TMN Group plc (AIM: TMN), the UK's premier online marketing services group, is pleased to provide the following operational and trading update following the completion of the acquisition of Internet Business Group plc ("IBG").
Highlights
* Headline operating profit for year to 30 April expected to be in line with consensus expectations * Record forward bookings including TMN Media's first ‚£1 million+ agreement * TAPPS acquisition completed in January, performing well * Acquisition of IBG completed 14 February 2008, integration to begin
Trading
We are pleased to announce that the Group has seen continued strong growth in the second half of the financial year, with a number of key client wins in all areas of the business. Each of our core divisions has seen strong growth continuing from the first six months and headline operating profit remains in line with consensus expectations. Our focus continues to be on strength of margin and earnings, so although revenue is expected to be around 10% lower than expectation, our operating profit remains in line with consensus.
We have significantly improved the sales visibility across our divisions. Our confirmed forward orders are running at their highest ever, stretching well into the next financial year. TMN Media has secured significant future business, including its largest agreement to date, at over ‚£1m for email campaigns on behalf of a major client for the rest of the calendar year. Additional visibility for the rest of the calendar year amounts to a further ‚£ 1.5m within the division. EDR's Pure Lead data cleansing technology now handles over 200,000 records per month across a number of clients, while their email planning and buying business continues to grow steadily. Pure Lead was recently nominated for the IAB's Innovation Award. Our Research divisions have achieved key client wins in the finance, entertainment and media sectors since the half year.
Due to the entry into the European market with the acquisition of TAPPS, the full launch of Envoy, our third party email distribution technology, will now be in the next financial year to allow for further development into a pan-European offering. BETA testing continues to go well and Envoy is well placed to deliver into multiple territories. We believe strongly that Envoy represents version "2.0" of email broadcast and continue to develop it in order to offer the strongest data management and email broadcasting tool for both internal and third-party use.
The Board believe the momentum that has developed into the second half will be continued into the new financial year. The addition of TAPPS and IBG to the Group means that TMN is ideally placed, as one of the UK's largest online marketing services groups, to service our clients' needs in online advertising, market research and affiliate marketing, with the opportunity for increased spend to be placed across our various divisions by both existing and new clients. Following the acquisition of TAPPS and IBG, the Group now employs over 200 staff across 5 offices, including London, New York and Amsterdam.
Cashflow
Our cash generation continues to be strong. Our net debt currently stands at ‚£ 2m, following the acquisition of IBG and associated costs. It is expected that we will be able to reduce this significantly by the end of this financial year.
Acquisitions
We are pleased to welcome TAPPS and IBG to the Group. The integration of TAPPS continues to proceed well and trading is in line with the Board's expectations.
TAPPS manages advertising sales for over 100 databases in the Netherlands. The focus is on continuing to build its strong market position in email marketing and lead generation and exploiting the synergies from introducing Group-wide products into a new territory.
IBG is part of the Group as of today and we look forward to updating on the trading at the year-end. It is clear that there are a number of synergies between IBG and TMN Group's existing divisions, with emphasis being placed on cross-sales opportunities into AffiliateFuture.
Commenting, Mark Smith, CEO of TMN Group, said:
"Since reporting interim results we have completed two acquisitions, which expand the range of services we are able to offer to customers and provide a foothold in the European market. Many opportunities exist to exploit the synergies between these businesses and the existing businesses in the Group, which have all continued to perform well during the second half of the year. It is an exciting time for the Group and we look forward to providing a further update at the year end. May I also take this opportunity to welcome the staff and management and, of course, the shareholders of IBG to the expanded TMN Group."
- End -Enquiries to:TMNMark Smith, CEO www.tmnplc.comCraig Dixon, CFO 020 7440 9310Investec Investment Banking(NOMAD and broker to TMN)Andrew Craig/ Erik Anderson 0207 597 4000Redleaf CommunicationsSamantha Robbins / Anna Dunkin 020 7822 0200
TMN GROUP PLC