ferrets stock to watch: photon group ltd

Ferrets Stock to Watch: PHOTON GROUP LTD
08:25, Thursday, February 22, 2007

GROWTH ATTRIBUTED TO ACQUISITIONS AND ORGANIC GROWTH

Sydney - Thursday - February 22: (RWE Aust Business News)
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OVERVIEW
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Photon Group Ltd (ASX:PGA) executive chairman Tim Hughes has
attributed net profit, which jumped 35 per cent to $6.86 million for the
half year to December, to a combination of acquisitions and robust
organic growth.

It compared with $5.08 million for the same period a year
earlier.

Revenue rose 52.7 per cent to $129.13 million from $84.56
million.

Basic earnings per share were 10.36c, up from 8.83c.

Interim dividend is 10c, fully franked, payable on April 3 to
shareholders registered on March 2.

"Traditional media is finding it very hard to grow as their
previously protected base is being attacked by new distribution platforms
such as digital media, the internet and more targeted direct campaigns
using email, field marketing and point of sale," Mr Hughes said.

"Photon's diversity and weighting towards these new and
fast-growing forms of communication and sales have underwritten these
results."

Chief executive officer Matthew Bailey said he was particularly
pleased with like-on-like sales growth of 12 per cent in a period where
traditional advertising generally has been pretty flat.

"More and more of our clients are interested in new ways to
communicate and sell their goods and services.

"We have a broad portfolio of communication and marketing
companies that have dedicated and hard-working staff.

"During the half we made four new acquisitions, expanding the
group to 29 companies.

"Companies acquired were IMega, Jigsaw, Ausrep and BWM.

"We continue to explore further opportunities for accretive
acquisitions," Mr Bailey declared.

In its long-running acquisition for listed Dark Blue Sea Ltd
(ASX:DBS), Photon Group has offered DBS shareholders 76c a share after
originally bidding 65c last year.

Photon purchased about 19.8 per cent of DBS shares on December 8
for 65c per share.

The company has even extended the offer another two weeks until
March 12.

Photon directors say that in the absence of its offer the
market price for DBS shares would fall below Photon's offer price of 76c.

SHARE PRICE MOVEMENTS
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Shares of Photon Group yesterday rose 4c to $6.04. Rolling high
for the year is $6.30 and low $3.80. Dividend is 20c to yield 3.31 per
cent. Earnings per share is 21.67c and p/e ratio 27.87. The company has
74.1 million shares on issue with a market cap of $448.1 million.

Photon Group has significantly strengthened its internet
marketing division with the acquisition of 51 per cent of OBMedia Inc
(Online Business Media).

OBMedia is a performance-based internet marketing group,
providing affiliate marketing services, banner advertising and search
traffic management and direction for its clients.

The remaining 49 per cent of OBMedia will remain owned by the
existing shareholders, Raja Gupta, Mike Lynn and Jeffrey Morgan.

Mr Hughes said the purchase of 51 per cent of OBMedia further
broadens Photon Group's exposure to the fast-growing online marketing
sector.

"Significantly, OBMedia is our first acquisition in the United
States and it provides a solid base for cross fertilisation and
development with our other online businesses, Imega Group and Returnity,"
he said.

The deal is structured in a way that will match capital payments
based on future performance.

BACKGROUND
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Photon Group Ltd joined the Australian Stock Exchange list on
April 30, 2004.

It is a specialised marketing services company.

The services are delivered by Photon to build and leverage
customer relationships, develop brands and generate sales.

It is involved in marketing, public relations, design,
advertising, retail marketing & merchandising and email marketing.

The group has operations in Australia and New Zealand.

Its specialist marketing services companies are recognised as
leaders in each of their disciplines.

Whether that is advertising, public and government relations,
design and branding, retail marketing, event management, internet and
mobile or point of sale campaigns.

Operating independently they focus on providing their specialist
skill base to solve client business problems.

The Photon community allows each company to extend its service
offering to its clients through access to the specialist skills offered
by the other group companies, confident in the knowledge each is a
proven performer with the same systems, values and commitment.

Its vision is to deliver industry leading financial returns
through the understanding of key markets and customers better than
anyone else; through cutting edge innovative solutions and ensuring it
continues to foster an entrepreneurial culture through independent
structure.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.