Vela Technologies Regulatory News (VELA)

11 Jul 2008 07:40



Deal Group Media plc

("DGM" or "the Group")

AGM Statement

Deal Group Media plc (AIM: DGM), an independent online marketing group, will hold its Annual General Meeting at 10:00am today at the 19 Cavendish Square, London W1A 2AW. 

At the meeting Adrian Moss, CEO, will provide the following trading update:

"The Group's strategy is to continue its focus on the Asia-Pacific region, including Australia, where for Asia Pacific in particular, the state of evolution for Internet advertising is significantly lower than in the UK and Europe. 

Currently Asian advertisers do not allocate as high a proportion of their total advertising budget to Internet compared to elsewhere whilst consumer adoption is high and growing. High growth rates in online advertising spend are expected as advertisers align their Internet spend to consumer media consumption. 

The levels of genuine competition are similarly low. There are few suppliers currently that can offer advertisers the width of services, technologies, experience and expertise that we offer. 

Delivering a demonstrable return on investment for clients is at the core of the Groups offering and this type of advertising is less susceptible to macro economic downturns, which actually strengthen advertisers focus of getting value for money and only increases the relevancy of our offering.

Operationally we are making solid progress and from our Singapore base the holding company continues to support our three business units DGM, AKTIV and Deploy with DGM still delivering by far the majority of our results to date.

Solutions offered by DGM are either single or multiple routes to clients target audience. Search engine marketing, affiliate marketing and banner advertising are the dominant strategies.

DGM's current delivery is dominated by Australia who continues to enjoy a dominant market position, recently winning the inaugural Australian Internet Advertising Bureau ("IAB") award for search engine marketing. The DGM Singapore and India operations are progressing well with India showing month on month growth, now making a consistently positive contribution to the Group. Singapore, which launched several months later than India, expects to deliver a positive contribution in Q3. DGM Singapore client wins include Starhub, Jetstar and Panasonic. DGM India client wins Make My Trip, Yatra, and Barclays Bank

AKTIV, a media sales business, launched in Singapore in Q3 2007 has quickly established itself as the leading digital advertising sales house in Singapore and has picked up a number of exclusive sales representation contracts with online publishers such as Imeem, a leading music based social networking site, Muliply, a social networking site, Virtual Tourist and WAYN both leading Asia Travel sites. Locally, within Asia Pac Aktiv have agreements pending with a number of leading industry brands, 

AKTIV has bolstered its regional footprint with the establishment of a small satellite office in Hong Kong and expects to start making a positive contribution to the Group within the financial year.

The AKTIV division also includes our South African business operating under the Fuel Group brand. This has been performing in line with expectation during the current financial year. As non-core element of the Asia Pacific strategy the Board is considering a proposed offer for divestment. 

Deploy is the latest offering in the Group providing a more complete digital media strategy and execution service covering both brand and direct response campaigns. Currently in a pre-launch phase, Deploy has signed a regional strategic alliance with BBDO/Proximity Asia, a creative division of the Omnicom Group. This relationship will see BBDO/Proximity clients being offered a uniquely complete digital creative and media strategy service, in initially in Singapore and the Philippines. 

The Group is benefitting in the current year from the sales of the majority share in the UK operating with central costs down by over 20% year to date, based on unaudited accounts.

In line with internal expectations the Group delivered positive earnings, before interests, taxation, depreciation and amortisation ("EBITDA") in May and June 2008 and the Board remains confident that despite its investment in the Asia Pacific region the Group will deliver a positive EBITDA for the current financial year.

- Ends - 

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