VMG To Dominate UK Shopping Mall Market

Adrian J Cotterill, Editor-in-Chief

Vision Media Group (International) PLC today, 20th August 2008 announced a major expansion of their shopping mall network – effectively this creates the largest digital mall network in the UK and if what we hear is correct the expansion won’t stop at the numbers they have announced so far – yes more Malls will becoming on board later this year – perhaps even as soon as October or November 2008.

The announcement was basically that VMG had signed contracts or heads of agreement with two large property groups which will add a further 33 shopping malls to their estate.

This brings the total number of malls to 57.

In those malls will be 527 digital panels (screens) of which 350 will be Iconic Pod portrait-style digital panels.

It’s great to see that the average length of the new contracts is 8 years AND importantly with no minimal rental guarantees – we think that the rental guarantees that Avanti Screenmedia pay their mall owners was probably (just) one of the stumbling blocks in the June negotiations “VMG To Buy Avanti Screenmedia’s Mall Business” which didn’t unfortunately come to anything.

We are told that the first phase of the roll-out will equip 16 malls with 200 Iconic Pod portrait panels ahead of the 2008 Christmas period, with further installations commencing in early 2009.

Mike Cottman, Executive Chairman of VMG told us “These agreements herald the success of the drive by the Group’s new executive team to dominate the UK shopping mall market. By bridging the gap between major brands and their potential consumers, shopping mall panels are an increasingly valued advertising medium because of their unique position at point-of-purchase”

The RNS that was issued to the stock market also made good mention of the positive impact on revenue that these deals would have…

The Company believes that the addition of these malls represents a significant escalation, by in excess of £7 million per annum, in the total value of potential advertising that can be sold by Clear Channel and that the enlarged VMG media inventory now represents a total gross annual advertising sales value of £25 million, enabling total possible gross advertising sales to a value of circa £200 million over the life of the contracts.

The Directors believe that the additional malls will provide the Group with approximately a further £1.5 million in net sales per annum upon the completion of the installations. This, combined with the estimated net sales value announced on 18 August 2008, should enable, once fully rolled out, annualised net sales in excess of £5 million per year for the Group.

In signing these agreements, VMG has created the largest contracted digital media network in UK shopping malls, in terms of number of malls and the combined potential audience. VMG now has more leading malls, as ranked by industry research organisation TWA (Trevor Wood Associates), under contract for digital media than any other UK media company. The Group’s expanded network will be seen by an annual audience in excess of 1 billion consumers at the point-of-purchase.

Clear Channel Outdoor UK of course is responsible for the procurement of national advertising across the VMG shopping mall network and they will undoubtedly be VERY excited about the sudden expansion of the network.

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