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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mediazest Plc | LSE:MDZ | London | Ordinary Share | GB00B064NT52 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.06 | 0.05 | 0.07 | 0.06 | 0.06 | 0.06 | 0.00 | 07:30:49 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Communications Services, Nec | 2.82M | 12k | 0.0000 | N/A | 1.02M |
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TIDMMDZ
("MediaZest", the "Company" or "Group"; AIM: MDZ)
Unaudited results for the six months ended 30 September 2017
CHAIRMAN'S STATEMENT
Introduction
The Board reports the consolidated unaudited results for the six months ended
30 September 2017 for MediaZest plc and its wholly owned subsidiary company
MediaZest International Ltd ("the Group").
Financial Review
* Revenue for the period was GBP1,339,000, down 9% (2016: GBP1,474,000).
* Gross profit was GBP643,000, up 2% (2016: GBP631,000).
* Gross margins improved to 48% (2016: 43%).
* EBITDA was a loss of GBP87,000 (2016: profit GBP4,000).
* Loss for the period after taxation of GBP149,000 (2016: loss of GBP67,000).
* The basic and fully diluted loss per share was 0.01 pence (2016: loss per
share 0.01 pence).
* Cash in hand at period end was GBP103,000 (2016: GBP137,000).
Operational Review
Results for the six months to 30 September 2017 are weaker than those for the
comparable period, with revenues down and administrative expenses up. However,
the fall in revenue was largely the result of two key projects slipping into
the subsequent period. The financial impact of this was a reduction in bookable
turnover of approximately GBP300,000, which will now be recognised in the second
half of the year. Without this slippage, the half-year results would have
represented the Group's best Operating results to date for any half-year period
and the knock on effect will be to show improvement in the second half of the
year.
Administrative expenses were higher mainly due to investment in the engineering
and administration department to meet increased demand (especially from
recurring revenue contracts), the introduction of the new employer's pension
regulations and an increase in commission costs. In addition, the Group
invested in an updated website and incurred other marketing costs during the
period, the benefit of which will be mainly felt in future periods.
Gross margins continue to improve as the business has become increasingly
focussed around managed service fees and less dependent on low margin 'box
shifting' transactional work. To this end, the Board is pleased to announce
further growth in recurring revenue contracts to a run rate of just under GBP
600,000 per annum (versus just under GBP400,000 per annum at the end of the
comparable period last year). The Board notes that several of the larger
contracts written during the period were towards the end of the half-year and
hence the benefit will mainly be accrued thereafter.
New client acquisition continued apace and the Group was pleased to add new
clients Hewlett Packard (for in-store work in EMEA (Europe Middle East and
Africa)), Godiva Chocolates, Volkswagen UK ("VW"), European Bank for
Reconstruction and Development ("EBRD"), and BMW. The Board anticipates further
projects to be delivered from these relationships.
The Group is receiving more international enquiries and opportunities and now
work with several key clients outside of the UK. During the period, the Group
rolled out digital signage solutions for Ted Baker alone in Asia Pacific, the
Middle East, Africa, and the United States. The consistency of delivery of high
quality solutions gives the Company a strong market proposition which is
attractive to clients.
During the six month period to 30 September 2017, revenue has continued to be
generated predominantly across the Retail and Corporate sectors. The Retail
sector (including Automotive Retail) continues to be the area of best
performance, and largest opportunity, but in addition the Group has acquired
new clients in the Corporate sector including EBRD, plus non-retail work for
BMW.
Highlights for the period include delivery of Studio B for Clydesdale Bank,
which opened in April, and the new VW store in Birmingham at the Bullring. In
addition, another new store for Clydesdale Bank was opened towards the end of
the period, again in Birmingham. Ongoing smaller project and recurring work
with existing clients Hyundai, Halfords, HMV, Kuoni, Diesel and Rockar
continued.
Overall strategy continues to be to focus the sales effort on a concentrated
number of high profile clients, providing innovative audio visual solutions
which have the potential to generate ongoing long term business opportunities,
across multiple sites, and to pursue greater recurring revenues by providing a
fully managed delivery and on-going support service to those clients. By
covering a larger proportion of the cost base with recurring revenue contracts,
the Group can deliver consistent profit month on month. It is also advantageous
for cash-flow purposes, and helped generate a cash in-hand balance at period
end of GBP103,000 (2016: GBP137,000). The Board expects the cash balance to improve
in the final quarter of the full financial year due to the completion of the
projects that slipped from the half year, ongoing new business wins and
renewals of further recurring revenue contracts.
The client proposition continues to be that of generating business loyalty
through excellence of delivery, coupled with offering a diverse product range
including the Group's own products. As noted above, recurring revenues are at
the forefront of this strategy and are being increased by offering contracts
for service and maintenance, content production and management, additional
consultancy and data analysis work.
Operating Costs
The Board continuously reviews costs whilst balancing investment in the sales
and marketing process.
As noted, costs increased somewhat this half-year as the business invested to
meet the demands of our growing customer base. This has included further
engineering resource to help support the increase in recurring revenue
contracts, but also increased marketing spend to attract new clients. The
MediaZest.com website has been overhauled to improve the presentation of the
Group to clients and investors and generate more incoming opportunities. In
addition, the Group exhibited at the Retail Digital Signage Expo at London
Olympia in May 2017 for the first time in several years in order to boost new
business efforts. Finally, the Company also hosted its first Retail
Transformation Conference at Studio B recently inviting a select audience of
Retailers to learn about the Company's work in that space for Clydesdale Bank.
Outlook
The Board acknowledges that timing differences mean that the half-year results
do not reflect the continued improvement in the Group position but are
confident that by the full year (31 March 2018) this situation will be better
represented. Pending the outcome of a handful of current pitches for quarter 4
of that year, the Board hopes that the Company will deliver a consolidated full
year profit at EBITDA level for the first time.
The improvements in recurring revenue streams are important as the Company
moves to consistent month on month profitability, and is enabling the Group to
build a strong foundation for future growth.
Lance O'Neill
Chairman
15 December 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Audited
Six months Six months 12 months
Notes 30-Sep-17 30-Sep-16 31-Mar-17
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 1,339 1,474 3,013
Cost of sales (696) (843) (1,700)
Gross profit 643 631 1,313
Administrative expenses (730) (627) (1,315)
EBITDA (87) 4 (2)
Administrative expenses - depreciation & (28) (38) (77)
amortisation
Operating Loss (115) (34) (79)
Finance Costs (34) (37) (67)
Loss before taxation (149) (71) (146)
Taxation credit - 4 4
Loss for the period and total comprehensive (149) (67) (142)
loss for the period attributable to the
owners of the parent
Loss per ordinary 0.1p share
Basic 2 (0.01p) (0.01p) (0.01p)
Diluted 2 (0.01p) (0.01p) (0.01p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2017
Unaudited Unaudited Audited
As at 30-Sep-17 As at 30-Sep-16 As at 31-Mar-17
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 2,772 2,772 2,772
Property, plant and equipment 43 63 51
Intellectual property 5 26 14
Total non-current assets 2,820 2,861 2,837
Current assets
Inventories 92 99 69
Trade and other receivables 585 491 243
Cash and cash equivalents 103 137 160
Total current assets 780 727 472
Current liabilities
Trade and other payables (1,284) (1,086) (860)
Financial liabilities (447) (385) (424)
Total current liabilities (1,731) (1,471) (1,284)
Net current liabilities (951) (744) (812)
Non-current liabilities
Financial liabilities (11) (35) (18)
Total non-current liabilities (11) (35) (18)
Net assets 1,858 2,082 2,007
Equity
Share Capital 3,499 3,499 3,499
Share premium account 5,221 5,221 5,221
Other reserves 146 146 146
Retained earnings (7,008) (6,784) (6,859)
Total equity 1,858 2,082 2,007
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Share Share Share Options Retained Total
Capital Premium Reserves Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March 2016 3,299 5,138 146 (6,717) 1,866
Loss for the period - - - (67) (67)
Total comprehensive loss for the period - - - (67) (67)
Issue of share capital 200 100 - - 300
Share issue costs - (17) - - (17)
Balance at 30 September 2016 3,499 5,221 146 (6,784) 2,082
Loss for the period - - - (75) (75)
Total comprehensive loss for the period - - - (75) (75)
Balance at 31 March 2017 3,499 5,221 146 (6,859) 2,007
Loss for the period - - - (149) (149)
Total comprehensive loss for the period - - - (149) (149)
Balance at 30 September 2017 3,499 5,221 146 (7,008) 1,858
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Audited
Six months Six months 12 months
Note 30-Sep-17 30-Sep-16 31-Mar-17
GBP'000 GBP'000 GBP'000
Net cash used in operating activities 3 (195) (95) 222
Taxation - - 9
Cash flows used in investing activities
Purchase of plant and machinery (10) (12) (23)
Disposal of plant and machinery - 11 11
Purchase of intellectual property (2) - -
Purchase of leasehold improvements - - (4)
Net cash (used in) / generated from (12) (1) (16)
investing activities
Cash flow from financing activities
Other loan repayments (10) (10) (42)
Shareholder loan receipts 32 78 28
Shareholder loan repayments - (50) (94)
Interest paid (40) (48) (25)
Proceeds of share issue - 250 250
Share issue costs - (17) (17)
Net cash (used in) / generated from (18) 203 100
financing activities
Net decrease in cash and cash equivalents (225) 107 315
Cash and cash equivalents at beginning of 92 (223) (223)
period / year
Cash and cash equivalents at end of period / 4 (133) (116) 92
year
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The Group's annual financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted for use in the EU
applied in accordance with the provisions of the Companies Act 2006 applicable
to companies preparing financial statements under IFRS.
Accordingly, the consolidated half-yearly financial information in this report
has been prepared using accounting policies consistent with IFRS. IFRS is
subject to amendment and interpretation by the International Accounting
Standards Board (IASB) and the IFRS Interpretations Committee and there is an
ongoing process of review and endorsement by the European Commission. The
financial information has been prepared on the basis of IFRS that the Directors
expect to be applicable as at 31 March 2018.
This interim report does not comply with IAS 34 "Interim Financial Reporting"
(as adopted by the European Union), as permissible under the AIM Rules for
Companies.
Going Concern
The Directors have considered financial projections based upon known future
invoicing, existing contracts, pipeline of new business and the number of
opportunities it is currently working on, particularly in the Retail sector. In
addition, these forecasts have been considered in the light of the ongoing
challenges in the global economy, previous experience of the markets in which
the Group operates and the seasonal nature of those markets, as well as the
likely impact of ongoing reductions to public sector spending. These forecasts
indicate that the Group will generate sufficient cash resources to meet its
liabilities as they fall due over the next 12 month period from the date of
this interim announcement.
As a result the Directors consider that it is appropriate to draw up the
financial information on a going concern basis. Accordingly, no adjustments
have been made to reflect any write downs or provisions that would be necessary
should the Group prove not to be a going concern, including further provisions
for impairment to goodwill and investments in Group companies.
Non-statutory accounts
The financial information contained in this document does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
("the Act").
The statutory accounts for the year ended 31 March 2017 have been filed with
the Registrar of Companies. The report of the auditors on those statutory
accounts was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under Section 498(2) or (3) of the
Act. The financial information for the six months ended 30 September 2017 and
30 September 2016 is not audited.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of GBP149,000 (2016: GBP67,000) by the weighted average number of
shares during the period of 1,239,757,641 (2016: 1,195,801,597). The diluted
loss per share is identical to that used for basic loss per share as the
exercise of warrants and share options would have the effect of reducing the
loss per share and therefore is not dilutive under International Accounting
Standard 33 "Earnings per Share".
NOTES TO THE FINANCIAL INFORMATION (Continued)
3. Cash used in operations
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-17 30-Sep-16 31-Mar-17
GBP'000 GBP'000 GBP'000
Operating loss (115) (34) (79)
Depreciation of tangible assets 18 25 52
(Profit) / Loss on sale of tangible assets - (9) (9)
Amortisation of intangible assets 10 13 25
Conversion of interest on shareholder loans into - - 50
shares
Decrease / (increase) in inventories (23) (31) (1)
(Decrease) / increase in payables 257 75 79
(Increase) / decrease in receivables (342) (134) 105
Net cash outflow from operating activities (195) (95) 222
4. Cash and cash equivalents
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-17 30-Sep-16 31-Mar-17
GBP'000 GBP'000 GBP'000
Cash held at bank 103 137 160
Invoice discounting facility (236) (253) (68)
(133) (116) 92
5. Subsequent events
There have been no subsequent events since 30 September 2017.
6. Distribution of the Half-Yearly
Report
Copies of the Half-yearly Report will be available to the public from the
Company's website, www.mediazest.com, and from the Company Secretary at the
Company's registered address at Unit 9, Woking Business Park, Albert Drive,
Woking, Surrey, GU21 5JY.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
Enquiries:
Geoff Robertson
Chief Executive Officer
MediaZest Plc 0845 207
9378
Edward Hutton / David Hignell
Nominated Adviser
Northland Capital Partners Limited 020 3861
6625
Claire Noyce
Broker
Hybridan LLP 020 3764
2341
END
(END) Dow Jones Newswires
December 15, 2017 02:00 ET (07:00 GMT)
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