Deal Media Share Discussion Threads

[run rabbit] 13/5/2009 18:07

The Group at a Glance
DGM DGM delivers online customer acquisition and lead generation strategies for advertisers or their agencies. The business focuses on all major consumer touch-points but is dominated by search engine and affiliate marketing strategies. In essence, it provides 'direct marketing online'.

AKTIV AKTIV is an outsourced sales house selling online advertising space direct to advertisers or their agencies. The business performs this function either on an exclusive representative basis or using economies of scale to acquire and trade quality inventory at discounted rates.

Deploy Deploy is a strategic digital media and marketing agency. The business provides a more complete online service including strategy, media planning and buying, execution and delivery in the Australasia region.

DGM UK Deal Group Media plc has a 49% holding in DGM UK. The UK business offers affiliate marketing, low cost display advertising, and search engine marketing under the brand names of dgmPerformance, dgmAdNetwork and dgmSearchLab.

[run rabbit] 13/5/2009 18:06

Financial Highlights
Highlights

Sales increased by 56% to £14.7 million (2007: £9.4 million)
Gross profit increased by 45% to £4.2 million (2007: £2.9 million)
Increase in gross profit predominantly reinvested in new Asian operations
Strong growth from Group's new Asian operations in Singapore and India
£608,000 provision made against outstanding lease obligations in the UK
Loss from continuing operations increased by 14% to £2.4 million (2007: loss £2.1 million)
Confident of trading profitably by the end of the financial year
Commenting on the results, Adrian Moss, Chief Executive, said: "I am encouraged by our headline growth in the year, especially as our new Asian operations delivered 75% of our growth at gross profit level. This growth has facilitated our planned investment in the new operations.

"Our loss from continuing operations is similar to last year before account is taken of a full provision of £608,000 against the remaining lease obligations relating to our former UK premises.

"The Internet in the Asian marketplace is already significantly larger in terms of users than Europe or the US notwithstanding relatively low penetration. This opportunity, combined with our early establishment of operations in this region, gives us confidence that the Group is in an excellent position to benefit from the inevitable further adoption of digital advertising in Asia and the macro economic upturn.

"I am confident that the Group will be trading profitably by the end of the current period."

[run rabbit] 13/5/2009 17:59

Deal Group Media plc is a holding company with three businesses operating in the online media and marketing industries with particular focus in Australasia. The business delivers stand-alone and multi-channel solutions to all stakeholders in the digital advertising market place. The group brings together performance-based marketing expertise with best-in-class proprietary & partner-based technology for effective delivery.




Deal Group Media plc offers a wide range of services for advertisers and online partners.

We work for advertisers and media owners, building brands, delivering visitors, generating leads, enhancing search engine rankings, establishing customer relationships and overall, maximising return on investment for their campaigns.

For each of our services we work with a range of online partners helping to generate revenue.

[run rabbit] 13/5/2009 15:01

Good to see someone showing confidence and picking up 250K. That was all that they were showing on the offer at the time too.

[run rabbit] 13/5/2009 14:22

Was looking very oversold but limits now are good for the buyer.See this as a good recovery play.

[loverat] 12/5/2009 13:36

Wow - I remember holding these at about 70 times today's price. Looks like another one for the bin.

[niggle] 12/5/2009 13:32

Is affiliate marketing still a growth area? I know that voucher sites do OK but the rest are doing very badly as affiliate sites find it harder to get any google rank.

[almosr] 08/5/2009 19:56

Sorry....I did not mean to depress the price!

[inv3stwise] 07/5/2009 12:03

Fair point!

[almosr] 06/5/2009 10:00

inv3, you are suggesting a possible 10x growth in valuation through trading alone; IMHO, in view of current growth trends in t/o, but also overheads, that is as unlikely as Adrian flying without the aid of an aeroplane.
However, I still think Omnicom/BBDO must be looking at DGM very closely......I know all Ad groups are cash-strapped at the moment, but this is the one of the few growth areas left, especially in Far East, so they will not be happy to see this key part of their business in the hands of Adrian......for them £15-20m is still petty cash to acquire a key operation....which values the shares at maybe 4p.
That is at least getting close to the 5p offer Adrian foolishly turned down a couple of years ago!......I think his very shrewd chairman (David Lee) would advise him now to take the money and run at anything over 4p

[inv3stwise] 06/5/2009 08:08

Guys like many been in and out of here since the ibnet days; but to say this is a 5 or 6 bagger or bust (in 18 months), isn't really great odds.

Investers on that punt would want at least a 10 bagger, which I believe with a fair wind is very possible here!

A £2.5miliion mkt cap is poor (but correct with uncertainties around); but is it really asking to much to be at £25 million in say 24-36 months?

[nisbet] 04/5/2009 13:44

Jeffian the difference between .00000001p and worthless is 100%. The point I am making is that referring to this as an 8 to 12 month call option itself implies the speculative nature of the investment. There are many investors who pay a premium for call options with the knowledge that if the underlying share price does not rise then the option expires worthless. However, they buy with this knowledge and the same would apply to DGM. The operational gearing of this business when viewed against the current market cap of the company, is tantamount to comparing it with an in-the-money call option with with unidentifiable/questionable intrinsic value, except for the increasing visibility of DGM's growing penetration of its Far East/Sub Continent operations. If ever "caveat emptor" applies it is here. It's either a 5 or 6 bagger or a wipe out.

[ivegonelong] 04/5/2009 12:19

i feel that the potential upside, far outweighs the risk to my own investment in this company. Sure, am could 'milk' this company, but with his stake in it, I doubt he will do that. In terms of income generation, he is succeeding, now he needs to further develop the business taking advantage of the huge potential of this emerging market and most importantly, control costs.
When the share price was 22p + i had 1000000plus,I therfore have suffered huge losses.Since then I have increased my holding 2.5 fold and these latest results confirm that, whilst risky, for me its worth the punt.

[jeffian] 04/5/2009 12:06

"The point is that there is little difference between .65p and worthless."

If I may, a comment from a former holder who has been following to see if worth re-entering -

the "difference between .65p and worthless" is actually 100%! However apparently 'cheap' the sp, there is still the potential to lose money.

Regards, Ian

[ivegonelong] 04/5/2009 09:03

I think the biggest problem for DGM shareprice is that the city has lost trust / confidence in the board. Its future share price will be driven by results, not rumours or expectations.
If they can continue to increase gross profit, and other exceptional items removed from the balance sheet, would a £3 million net be possible? this would equate to at least 5p.
I am pleased AM is CEO, his ability to develop is proven, previous problems, (collapse in sp) ,are related to technology ( now sorted) and business model.This model appears to have changed for the better, with a far more diverse customer base.
Also am has a vested interest, with a shareholding circa 45 000 000, that's just under £1/2 million every penny the share price goes up!

[fireplace22] 02/5/2009 20:01

nisbet, in my case the little difference is worth £8K. But agree there is little point selling now at .6p. I've waited this long for the Far East business to become established so I'll wait a little longer to see if it is successful.

[nisbet] 02/5/2009 16:43

watcher101

The business was built very well in terms of market penetration/client build. Their downfall was all back office/computer system related. The share price is under a penny and until we see proof of break even by the end of the year not many will give the company the benefit of the doubt. If this is forthcoming then I think we might see talk of maybe £2m EBITDA for next year. The share price is pretty close to zero, so is discounting nothing. Lets look at the share price in terms of being an 8 to 12 month call option with the possibility of "exercise" = impied success and a 400% to 500% increase in the share price. On the other hand the "option" could expire worthless. The point is that there is little difference between .65p and worthless.

[watcher101] 02/5/2009 02:49

Nisbet - This company does have experience at building in this type of environment, and crashing afterwards.

Now over a year at under a penny.

[kirs] 30/4/2009 11:41

Another CFO sacked... You have to ask the question 1 is unlucky, 4 you have to figure it is impossible to work with the CEO. They need a CFO - don't trust this CEO to be CFO as well...

[nisbet] 28/4/2009 17:09

They were .72p bid this morning.

[fireplace22] 28/4/2009 14:53

nisbet, I think you will find all the trades today except the last at .6p were all buys. I've had barclays trying to sell a few of mine at .65p all morning without success.

[nisbet] 28/4/2009 12:38

I find the progress made in the new geographical ventures quite remarkable. To have achieved the turnover and gross profit in that time is very impressive. The £600,000 write off for the London office is one-off. Add only another 25% to turnover and we have a company making a substantial profit. Remember, most of the cost is fixed and therefore the operational gearing is significant. AM has a hugely impressive record at building this type of business but do not confuse this ability with the logistic errors made when building the U.K. business.

Given the turnover achieved I do not consider it unrealistic to add 50% for the current year. If this is attained then we could be looking at a company making £2m to £3m next year.

Note that todays sales are achieving a premium over the bid. This suggests that a collection order is taking place.

[almosr] 28/4/2009 10:16

Well that was short-lived!

[almosr] 28/4/2009 08:17

I agree...usual spin, but actually the results look okay to me overall, The £6m, ken, I assume to be the running costs of the businesses (Staff, offices etc.
I know we have said this a milliion times already, but we might just be about to move into actual PROFIT, especially if the £ v Sing$ ever moves back in their favour.
Ho hum. We will see