Deal Group Media’s decision to concentrate on its Asian interests is paying off.
The online advertising company sold a 51% stake in its loss-making UK business at the end of 2007. This left it to concentrate on its Australian operation and the less mature businesses in Singapore and India. The latter operations generated more than half of the gross profit growth in the six months to June 2008.
Chief executive Adrian Moss says he is pleased that he fought to keep the Australian business open when DGM ran into trouble around three years ago.
Internet penetration in the Asia Pacific markets is relatively low. That provides further growth prospects. DGM focuses on international companies in these markets.
Revenues increased 72% to £6.69m and gross profits 54% to £2.06m in the first half. The reduction in pre-tax loss from £810,000 to £743,000 is more modest but DGM is investing in its new geographic markets and the full benefits are yet to show through. Central overheads have been reduced and are likely to fall further as the functions are carried out in Asia rather than the UK.
There is £873,000 in cash in the balance sheet.
Client dependency is reducing. The largest client still accounts for one-third of revenues but that percentage is being reduced. The top 10 customers account for 59% of revenues against 83% less than a year ago.
DGM has started a digital advertising agency. It will help its clients to come up with online advertising strategies. This could end up a significant part of the group.
At 0.48p a share, DGM is valued at £2.16m.
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