Vela Technologies Regulatory News (VELA)

Asia Digital Holdings Plc

("ADH" or the "Company")

Trading Update and Strategic Review

Asia Digital Holdings plc (AIM: ADH.L), the independent, Asia focused, online marketing group, today announces an update on trading.

The Board expects that results for the full year will show a significantly reduced loss against 2010. This has been driven by improvements in business unit performance and a material reduction in central costs. The sales mix and the geographical source of sales in the Company's continuing operations has changed and will result in an overall reduction in sales for the full year compared to 2010 along with an increase in gross profit for the same period. The Board expects to report an approximate 75% reduction in the negative contribution from the operating businesses.

The Board has continued to focus on cutting group costs where possible. Central costs include technology provision, management and support functions along with the cost of maintaining the Company's listing. In 2009 and 2010 central costs amounted to approximately £2 million. The Board expects to report a 59% reduction in these costs for 2011 on a like for like basis.

The Company has successfully concluded certain matters with the VAT authorities in the UK and this has led to a provision release of £131,233 during October 2011.

As a result of the above the Board expects that results for the full year ending 31 December 2011 will show a material reduction in EBITDA loss.

The Company has now received the final tranche of funding from the disposal of the DGM Australia business, amounting to AU$428,000 (circa GBP £278,000), net to the Company. At the end of November 2011, the Company has cash at bank of £235,000 and a negative net asset position of £525,633. As announced previously, there are restrictions on repatriation of funds from our Indian operation. We expect our India operation to account for £64,000 of the Group's cash resources at month end.

Whilst the Board has continued to manage costs as detailed above, due to the ongoing constraints of limited working capital the Board is undertaking a strategic review of each of the Company's business units. Completion of such review may culminate in the proposed disposal of one or more of the Company's subsidiaries in the short term. Consideration is also being given by the Board to alternative financing options for group.

China

Progress in China has been much slower and more strategically challenging than expected since the establishment of the Company office there in 2010. Throughout 2010 and early 2011, ADH operated in China with one or two members of staff, predominantly servicing the Dell account. The Board is confident that the Dell business could grow on the back of a significantly increased budget and targets for 2012.

Since increasing the retained head count in the second half of 2011, the Company has started to acquire clients including Etam, Iforex, trader711 and Sofitel Hotels and is also building a pipeline of prospective business.

Singapore

Since the previously reported loss of its largest agency relationship in 2010, delivery in the Singapore business has seen some improvement. The Company has new client wins including CMC Markets, Far East Hospitality Group as well as affiliate marketing appointments for The Economist and Expedia.

The prospects for Singapore are positive with recent client wins yet to benefit results and a healthy pipeline of new business, and the Board expects to have significantly reduced the negative contribution for this operation for the full year.

India

The Indian operations have continued to improve over the first 10 months of the year with growth in sales and gross profit combined with a steady cost base. This has been achieved in an increasingly competitive environment.

The Company's operations in India have been consistently delivering a positive, albeit low level, contribution throughout recent years. In the 10 months to date, the contribution from India is approximately £187,000 compared to £97,000 for the first 10 months of 2010.

Adrian Moss, Chief Executive of ADH, stated: "Since the disposal of our Australian business we have focused on the development of our business units in China, Singapore and India. We will update the market further following completion of our strategic review."

- Ends -

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