Online marketing intermediary Deal Group Media’s decision to up sticks and move to Asia is beginning to pay off, though its shares remain tainted by previous disappointment.

Once a £100m player in the UK’s Internet advertising services market, DGM suffered from the cutthroat competition and last year violently restructured itself to focus on the less mature and hence less competitive Asian market. Chief executive Adrian Moss is enjoying the experience hugely, as the company’s UK experience ‘allows us to set the agenda and work with companies like Nestlé and PepsiCo where we’d never have got a look-in in the UK.’

The group’s offering is now separated into three divisions, spread across offices in five countries, with the 49%-owned UK office involving ‘zero participation’ from the Plc board. The three units consist of online direct marketing business DGM, which works for advertisers and agencies; ad network Aktiv, which sells banner advertising for publishers; and digital agency Deploy, which develops companies’ digital strategies.

Sales in the six months to June climbed 72% to £6.7m, as new satellite operations in India and Singapore added 39% of revenue growth to continuing growth at the ‘core’ Australia operation. A gross profit of £2.1m was made, but at the pre-tax line this becomes a £743,000 loss.

The group is currently trading ‘slightly below’ break-even but, as Moss declares, ‘what we’ve done so far in Asia is nothing compared to what we can do.’ DGM’s bombed-out shares, contaminated as they are by the earlier fall from grace and profits, have yet to reflect improving prospects and should only attract the bravest of punters. Very speculative.

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Deal Group Media	AIM	£4.1m	0.90p	0.00p
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