Real Affinity plc, the AIM listed direct marketing and communication specialist has acquired Navigator: The Sports Business Limited, a sports marketing company, for £590,000 in 27,699,530 new ordinary shares. In addition, deferred consideration of up to a maximum of £4.3 million, also to be satisfied by the issue of new ordinary shares, may be payable in two tranches in 2004 and 2005, depending on performance.

Navigator, established in 2000, advises clients on investing in sport as part of an overall marketing strategy and on how to maximise the benefits of brand association within sport. Clients have included Puma, Umbro, Sage, Fox Kids TV Europe and institutions ranging from the English Schools FA to the Institute of Thai Culture. It is currently tendering for projects in a variety of sports ranging from sailing and motorsport to golf and athletics. Revenues are generated from consultancy and project fees. Over the last three years Navigator has increased turnover from £90,000 to £410,000 and further to £520,000 in the six months ended 30 September 2003.

Mark Richardson, Chief Executive of Real Affinity, said: ‘Navigator is in an exciting and fast growing field of marketing which we believe offers real scope for growth. It has a good reputation, an international network of affiliates and an extremely experienced and well known management team including Glen Kirton who was the tournament director of Euro 96.

‘Navigator’s innovative ideas in using sport as an integral brand and consumer marketing tool compliment our own business and take us into a new market area. This is great news for us as the global sports marketing industry, excluding sales of sportswear and major TV rights, is thought to be worth £25bn a year. The UK market accounts for around £2bn, of which Navigator believes its target market is worth around £750m.’

Navigator’s Board has wide experience in sports marketing. Chief Executive Gerard Corcoran has been a sports marketing consultant for the past eight years and joins the Board of the Enlarged Group. Glen Kirton, Chairman and Business Development Director, was tournament director of Euro 96, the hugely successful soccer event staged in the UK. Graham Morgan, another key member of the management team, was formerly head of sport at Adidas UK and has worked with premier league clubs and players such as David Beckham and Paul Gascoigne.

Real Affinity has also undertaken a placing of 104,000,000 new ordinary shares at 1.25p per share to raise approximately £1.3m (before expenses). These funds will be used to mount an extensive publicity campaign to raise the profile of Navigator, for the appointment of additional staff, investment in IT equipment and to provide additional working capital for the enlarged group. The placing has been fully underwritten by Seymour Pierce.

Real Affinity, which floated on AIM in March 2001, has been seeking an acquisition that could significantly contribute to strengthening its position in the marketing services sector. The Board believes Navigator, which has offices in London and Leeds, represents an excellent strategic fit with its existing operations, Ladders, a specialist direct marketing company, and Ecomextra, which provides advice and creative web-based solutions for its clients.

Both the acquisition and the placing are conditional on shareholder approval, and this is to be sought at an EGM of the Company to be held on 2 February 2004.

For more details contact:

Mark Richardson
CEO, Real Affinity plc
Tel: 01274 421 606

Hugo de Salis/Cliff Feltham
St. Brides Media
Tel: 020 7242 4477