Half-yearly Report
MediaZest Plc
Half-yearly unaudited results for the six months ended 30 September 2012
CHAIRMAN'S STATEMENT
Introduction
The results for MediaZest Plc ("MediaZest", the "Company", and collectively
with the Subsidiary Company Touch Vision Ltd, the "Group") reflect the
six-month period to 30 September 2012 and incorporate the results of its wholly
owned subsidiary.
The Company has today announced a placing of 149,166,900 shares at 0.12p per
share to raise £179,000 before expenses.
Financial Review
Revenue for the period was £964,000 (2011 - £1,746,000) and the Group made a
loss for the period, after taxation, of £239,000 (2011 - £151,000) after
finance costs of £55,000 (2011 - £42,000) and having paid administrative
expenses of £625,000 (2011 - £754,000). Gross margin was £461,000 (2011 - £
651,000). The basic and fully diluted loss per share was 0.073 pence (2011 -
0.061 pence). The Group had cash in hand of £33,000 (2011 - £139,000) at the
period end. EBITDA was a loss of £164,000 (2011 - £103,000).
Operational Review
The results for the period reflect a difficult start to the financial year with
turnover lower than the corresponding prior period, although an improvement on
the preceding six months. This is partly due to timing issues, as the
corresponding prior period had two larger contracts with total value of
approximately £550,000 that fell into those months. The Company anticipates
that revenues will be more evenly spread in the current financial year.
Despite this fall in topline revenue, an ongoing emphasis on margins and sector
mix has led to a considerable improvement in gross margin from 37% to 48%. This
is largely due to the policy of reducing the Group's historical reliance on the
Education sector and to concentrate efforts on enhancing existing and
developing new business in the Retail and Corporate sectors.The Board believes
that this is where the MediaZest offering is most effective and the
opportunities more attractive.
As noted in the previous year's results, the year began with a difficult
quarter. Since then trading has improved considerably and this trend has
continued. Both sales and pipeline opportunities have grown in the months since
July and the Company has already been awarded significant project business that
is scheduled to be completed in calendar year 2013. This includes a large
project with revenue in excess of £400,000 along with the achievement of our
first significant revenues that have emanated from our growing overseas
efforts, in this instance from the United States.
Despite the tough prevailing general economic climate, work in the Retail
sector has picked up since the summer, and the Group is pleased to have
provided a wide range of video wall, digital signage and point of sale
technologies to several new clients in the period as well as continuing to work
with the likes of JD Sports, Kuoni, and Samsung (via agency Cheil).
In October 2012 the Company won its second major industry award, a POPAI (Point
of Purchase Advertising International) silver prize for in-store work with HMV,
providing headphone demonstration technologies.
The Group wishes to take advantage of the improvement in trading and growth of
audio visual in the Retail sector in recent months.Therefore, to assist it in
attaining this objective and to provide additional working capital for the
Group, the Company has undertaken a small placing to raise £179,000 of capital
before expenses. This is necessary for the continued development of the Group.
Directors are aware of the dilutive effect that any placement at the current
share price has, and have therefore kept the amount of this fundraising to as
modest a level as is feasible.
Outlook
Moving forward, the Board continues to believe that the general economic
climate will remain difficult. Within this context the Board also recognizes
the difficulties inherent in making accurate revenue projections and the timing
thereof. Therefore, in the interest of prudence, the Board have taken further
steps to reduce overheads. In this context, from April 2013, following the
expirationof the lease at the Group's main Farnham office, the Group will move
into new premises and expects to be able to save significantly on occupancy
costs by moving to premises with coststhat are representative of rental market
changes since the present lease agreement was entered into.
The Group intends to continue to place ongoing and increasing emphasis on the
MediaZest Retail and Corporate offerings. It believes that the opportunities
for MediaZest's services will continue to grow, notwithstanding the head wind
of budgetary constraints in the general economic climate. The Group has
experienced, over the last 12 and in particular six months, an increase in
usage of audio visual services in the Retail sector in particular, and that
trend appears set to continue. The Group is in a good position to capitalise
further on this and continues to pitch for business from substantive parties.
As part of this effort, the Group is looking to increase the number of sales
people it employs to both develop and consummate business in such markets.
Lance O'Neill 19 December 2012
Chairman
STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2012
Unaudited Unaudited Audited
Six months Six months 12 months
Notes 30-Sep-12 30-Sep-11 31-Mar-12
£'000 £'000 £'000
Continuing Operations
Revenue 964 1,746 2,521
Cost of sales (503) (1,095) (1,394)
Gross profit 461 651 1,127
Administrative expenses (625) (754) (1,423)
EBITDA (164) (103) (296)
Administrative expenses - depreciation (20) (6) (24)
Operating Loss (184) (109) (320)
Interest (55) (42) (104)
Loss before taxation (239) (151) (424)
Taxation - - -
Retained loss on ordinary activities (239) (151) (424)
after taxation
Loss per ordinary share
Basic 2 (0.073p) (0.061p) (0.002p)
Diluted 2 (0.073p) (0.061p) (0.002p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 SEPTEMBER 2012
Unaudited Unaudited Audited
As at As at As at
30-Sep-12 30-Sep-11 31-Mar-12
£'000 £'000 £'000
Non-current assets
Goodwill 2,772 2,772 2,772
Property, plant and equipment 83 40 97
Total non-current assets 2,855 2,812 2,869
Current assets
Inventories 95 156 106
Trade and other receivables 406 759 270
Cash and cash equivalents 33 139 88
Total current assets 534 1,054 464
Current liabilities
Trade and other payables (1,093) (1,246) (789)
Financial liabilities (546) (496) (547)
Total current liabilities (1,639) (1,742) (1,336)
Net current liabilities (1,105) (688) (872)
Non-current liabilities
Financial liabilities - (17) (8)
Total non-current - (17) (8)
liabilities
Net assets 1,750 2,107 1,989
Equity
Share Capital 2,587 2,507 2,587
Share premium account 4,004 3,929 4,004
Other reserves 7 7 7
Retained earnings (4,848) (4,336) (4,609)
Total equity 1,750 2,107 1,989
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Share
Share Share Options Retained Total
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 31 March 2011 2,507 3,929 7 (4,185) 2,258
Loss for the period - - - (151) (151)
Total comprehensive income for - - - (151) (151)
the period
Balance at 30 September 2011 2,507 3,929 7 (4,336) 2,107
Loss for the period - - - (273) (273)
Total comprehensive income for - - - (273) (273)
the period
Issue of share capital 80 80 - - 160
Share issue costs - (5) - - (5)
Balance at 31 March 2012 2,587 4,004 7 (4,609) 1,989
Loss for the period - - - (239) (239)
Balance at 30 September 2012 2,587 4,004 7 (4,848) 1,750
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Unaudited Unaudited Audited
Six Six 12
months months months
Note 30-Sep-12 30-Sep-11 31-Mar-12
Cash flows from operating activities £'000 £'000 £'000
Cash used in operations 3 (82) (137) (141)
Net cash used in operating activities (82) (137) (141)
Cash flows from investing activities
Purchase of property, plant and equipment (6) (14) (62)
Purchase of leasehold improvements - - (4)
Net cash used in investing activities (6) (14) (66)
Cash flow from financing activities
Repayment of borrowings (8) (8) (16)
Shareholder loans - - 50
Shareholder repayments - (25) (25)
Interest paid (55) (42) (104)
Net proceeds on issue of shares - - 160
Share issue costs - - (5)
Net cash (used in)/generatedfrom financing (63) (75) 60
activities
Net decrease in cash and cash equivalents (151) (226) (147)
Cash and cash equivalents at beginning of 4 151 151
period
Cash and cash equivalents at end of period 4 (147) (75) 4
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 2013.
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
economic difficulties in the UK and 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
accounts 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 2012 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 2012 and
30 September 2011 is not audited.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £239,000 (2011 - £151,000) by the weighted average number of
shares during the period of 327,625,327 (2011 - 247,625,327). The diluted loss
per share is identical to that used for basic loss per share as the exercise of
warrants would have the effect of reducing the loss per share and therefore is
not dilutive under International Accounting Standard 33 "Earnings per Share".
3. Cash Generated From/(Used In) Operations
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-12 30-Sep-11 31-Mar-12
£'000 £'000 £'000
Operating loss (184) (109) (320)
Depreciation of tangible assets 20 6 24
Decrease/(increase) in inventories 11 (36) (9)
Increase/(decrease) in payables 207 238 (89)
(Increase)/decrease in receivables (136) (236) 253
Cash generated used in operations (82) (137) (141)
4. Cash And Cash Equivalents
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-12 30-Sep-11 31-Mar-12
£'000 £'000 £'000
Cash held at bank 33 139 88
Invoice discounting facility (180) (214) (84)
(147) (75) 4
5. Subsequent Events
The Group today announces it has completed a fundraising of £179,000 before
expenses by way of issuing 149,166,900 ordinary shares. The shares are expected
to be admitted to AIM on 24th December 2012.
6. Distribution of the Half-yearly Report
Copies of the Half-yearly Report will be available to the public from
the Company website, www.mediazest.com, and from the Company Secretary at the
Company's registered address at 27/28 Eastcastle Street, London, W1W 8DH.
MediaZest Plc
Tel: 020 7724 5680
Contact: Geoff Robertson
Nominated Adviser
Northland Capital Partners Limited
Tel: 0207 7968800
Contact: Gavin Burnell/Edward Hutton
Broker
Hybridan LLP
0207 947 4004
Contact: Claire Noyce
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