Interim Results to 31 Dec 2009
31 March 2010
MediaZest Plc
("MediaZest" or the "Group")
Unaudited results for the six months ended 31 December 2009
CHAIRMAN'S STATEMENT
Introduction
On 12 February 2010, the Board of MediaZest announced that it had raised £
324,000 to fund both the Company's working capital requirements and to
contribute towards restructuring its capital base. Consequently, given both the
level of funds raised and the timing thereof, the Board decided to extend the
current accounting period to 15 months, ending 31 March 2010. This was to
enable the Company to present audited accounts that better reflect the current
position and its improvement since the last reporting period.
The Company, therefore, as a consequence of this change in the year end from 31
December 2009 to 31 March 2010, reports this second set of interim results, to
cover the six months to 31 December 2009. The audited results for the 15 month
period to 31 March 2010 must be published by 30 September 2010 but the Board
expects to be in a position to finalise and announce these earlier.
Financial Review
Revenue for the period fell sharply as a result of the recession, to £1,263,000
(2008 - £2,279,000) and the Group made a loss for the period, after taxation,
of £141,000 (2008 - £263,000) after finance costs of £9,000 (2008 - nil) and
having paid administrative expenses of £689,000 including £124,000 of
restructuring costs (2008 - £1,104,000 including nil restructuring costs). The
basic and fully diluted loss per share was nil pence (2008 - 1 pence). The
Group had cash in hand of £1,000 (2008 - £102,000) at the period end. EBITDA
excluding restructuring costs was £17,000 (2008 - loss of £241,000).
At the period end, the Group had received £154,000 of the £324,000 announced on
12 February 2010. The balance of £170,000 was received subsequent to the period
end. This fundraising was in addition to the £200,000 raised in August 2009.
Only the funds received by 31 December 2009 are reflected in these accounts.
Operational Review
As noted in the interim results to 30 June 2009, after encouraging and
improving performances during 2007 and 2008, the global recession has had a
significant impact on the Group's 2009 trading activities. In light of this,
the Board responded during the first half of 2009 by implementing a further
restructuring of the Group's cost base. Additional emphasis was placed upon
generating ongoing contractual revenues in order to build a more robust
business that could progress during the recession and deliver growth as the
economy improves.
The bulk of this restructuring was undertaken in the second quarter 2009 with
the effect being realised during the second half of that year. The second half
of 2009 also showed an increase in revenue, consistent with the seasonality of
TouchVision's Education business, which is considerably busier in the Summer
due to the holiday period when students are not in attendance. The combined
result was to enable the Group to deliver a profitable EBITDA, excluding
restructuring costs, for the six months to 31 December 2009. There is still
some way to go to achieve the results of which we believe the Group is capable,
but the Board is pleased to have reached this milestone in such a difficult
economic environment.
There has been evidence of a contraction in expenditure in the public sector
markets in which TouchVision operates. Despite this, it won two significant
University installation jobs of approximately £200,000 each, both delivered to
a very high standard. The balance of the Company's customer base has continued
to engage with TouchVision to deliver their audio-visual teaching solutions,
albeit in some cases with the restriction of reduced budgets.
The client base of MediaZest Ventures, predominantly high street retailers such
as JD Sports and O2, continued to grow with new clients acquired and existing
clients re-engaging. However, overall revenue was considerably less than the
previous year. The Board believes that this was a direct result of the
reduction in client marketing budgets as a consequence of recessionary
pressures. This view is reinforced by the high client retention rate that
MediaZest Ventures enjoyed. Therefore, despite expanding the client base, the
level of revenue per client decreased. The Board expects this to improve as the
overall economy begins to emerge from recession.
Outlook
January to March is historically the Group's weakest quarter of the year due to
the seasonality of the markets in which it operates. High street retail
business is quiet post Christmas, and Education is similarly quiet with no
major Educational holiday periods (Easter falling into April for 2010).
Revenues to date are broadly in line with the corresponding period last year
and combined with the reduced cost base, this has resulted in a noticeable
improvement in the Group's performance compared to the same period last year
and in previous years. The Group is continuing its strategy of prioritising
ongoing contractual revenues whereby the medium term objective is to cover 100%
of overheads through this type of business.
With regard to the future, MediaZest Ventures continues to market itself on the
basis that its unique positioning and profile will present enhanced business
opportunities as the economic climate improves. It is noticeable that since the
beginning of 2010, enquiries have increased significantly and its client base
continues to grow. Amongst the household names with which MediaZest Ventures is
engaged are the likes of Barclays Bank, Dr Martens, Famous Grouse, Fiat,
Microsoft, McDonald's, Nike and Philip Morris.
The sales cycle for MediaZest Ventures business can be several months and so
the Board expects the outcome of the current increase in enquiries to have an
effect during the second half of 2010.
The TouchVision business is also experiencing an increase in both enquiries and
activity, particularly in the Education sector as well as in general
installation work. Again, this activity is from a mix of both existing
customers who are aware of the strength of our offering in a very competitive
market, and new customers searching for better value in difficult times.
Since July 2009 we have improved the Group's balance sheet significantly,
having injected considerable equity capital as well as paying down or
refinancing debt and our credit facilities. The Group overhead base has been
markedly reduced and the business restructured to address the challenges that
have been presented to it. Notwithstanding, the general business environment
remains difficult and any small business' access to both credit and financing
is challenging. The Board's objective is for the Group to achieve sustainable
profitability. It aims to achieve this by continuing to build upon the progress
that has been made since last year and to take whatever initiatives it deems
necessary to achieve this goal.
Lance O'Neill 30 March 2010
Chairman
For further information please contact:
Geoff Robertson, MediaZest
Tel: 020 7724 5680
Antony Legge, Nominated Adviser
Astaire Securities Limited
Tel: 020 7448 4400
www.mediazest.com
CONSOLIDATED INCOME STATEMENT
for the six months ending 31 December 2009
Unaudited Unaudited Audited
Six Six Twelve
months to months to months to
Notes 31-Dec-09 31-Dec-08 31-Dec-08
£'000 £'000 £'000
Continuing Operations
Revenue 1,263 2,279 4,424
Cost of sales (706) (1,438) (2,846)
Gross profit 557 841 1,578
Administrative expenses : other (540) (1,082) (2,129)
Administrative expenses : (124) - -
restructuring costs
EBITDA (107) (241) (551)
Administrative expenses: (25) (22) (47)
depreciation
Operating loss (132) (263) (598)
Interest (9) - (7)
Loss before taxation (141) (263) (605)
Taxation - - -
Loss on ordinary activities after (141) (263) (605)
taxation
Loss per ordinary share
Basic 2 £0.00 £0.01 £0.03
Diluted 2 £0.00 £0.01 £0.03
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2009
Unaudited Unaudited Audited
as at as at as at
31-Dec-09 31-Dec-08 31-Dec-08
£'000 £'000 £'000
Non-current assets
Goodwill 2,772 2,772 2,772
Plant and equipment 55 87 87
Total non-current assets 2,827 2,859 2,859
Current assets
Inventories 186 107 107
Trade and other receivables 269 617 617
Cash and cash equivalents 1 102 102
Total current assets 456 826 826
Current liabilities
Financial liabilities - borrowings (125) (220) (220)
Bank overdraft (83) - -
Trade and other payables (591) (835) (835)
Current tax liabilities (121) (110) (110)
Total current liabilities (920) (1,165) (1,165)
Net current assets / (liabilities) (464) (339) (339)
Net assets 2,363 2,520 2,520
Equity
Share Capital 2,362 2,283 2,283
Share premium account 3,327 3,211 3,211
Shares to be Issued 154 - -
Other reserves 7 7 7
Retained earnings (3,487) (2,981) (2,981)
Total equity 2,363 2,520 2,520
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 31 December 2009
Share Share Shares Share Retained Total
to be Options
Capital Premium Issued Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2008 2,283 3,211 - 7 (2,718) 2,783
Total comprehensive income for - - - - (263) (263)
the period
Balance at 31 December 2008 2,283 3,211 - 7 (2,981) 2,520
Balance at 1 July 2008 2,283 3,211 - 7 (2,718) 2,783
Total comprehensive income for - - - - (633) (633)
the period
Balance at 30 June 2009 2,283 3,211 7 (3,351) 2,150
Total comprehensive income for - - - - (141) (141)
the period
Expensing of old capital - (5) - - 5 0
raising cost to Share Premium
Amounts received in advance of - - 154 - - 154
share issue
Issue of shares 79 121 - - - 200
Balance at 31 December 2009 2,362 3,327 154 7 (3,487) 2,363
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 December 2009
Unaudited Unaudited Audited
Six Six Twelve
months to months to months to
Note 31-Dec-09 31-Dec-08 31-Dec-08
£'000 £'000 £'000
Net cash used in operating activities 3 (327) 130 (118)
Investing activities
Purchase of property, plant and (10) (25) (27)
equipment
Proceeds from disposal of property, - - -
plant and equipment
Net cash generated from / (used in) (10) (25) (27)
investing activities
Financing activities
Debt financing - invoice discounting net (59) (70) 220
drawdown / (repayment)
Share issue proceeds 200 - -
Amounts received in advance of share 154 - -
issue
Interest paid (9) - (7)
Net cash generated from / (used in) 286 (70) 213
financing activities
Net increase / (decrease) in cash and (51) 35 68
cash equivalents
Cash and cash equivalents at beginning (31) 67 34
of period
Cash and cash equivalents at end of (82) 102 102
period
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 Acts 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 International Financial Reporting
Interpretations Committee (IFRIC) 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 December 2009.
The financial information has been prepared under the historical cost
convention as modified by the revaluation of available-for-sale investments.
The principal accounting policies set out below have been consistently applied
to all periods presented.
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.
The Directors have considered financial projections based upon known future
invoicing, existing contracts, pipeline of new business, and previous
experience in the various markets in which it operates, in addition to
fundraising activity and the Group's debt based facilities. These forecasts
have been considered in light of the global recession and the significant cost
restructuring that was undertaken in the final quarter of 2008 and in 2009 as a
response to these conditions. The financial projections indicate that the
company will generate sufficient cash resources to meet its liabilities as they
fall due over the 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.
Non-statutory accounts
The financial information for the 6 months ended 31 December 2009 and 31
December 2008, and the year ended 31 December 2008 do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2008, were prepared under IFRS, and
have been delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified but did contain references to
going concern to which the auditors drew attention by way of an emphasis of
matter paragraph without qualifying their report and did not contain any
statement under section 498 of the Companies Act 2006.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £141,000 (2008 £263,000) by the weighted average number of
shares during the period of 133,825,327 (2008 - 22,825,327). 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 Twelve months
to to to
31-Dec-09 31-Dec-08 31-Dec-08
£'000 £'000 £'000
Operating loss (132) (263) (598)
Share option charge - - -
Depreciation of tangible assets 25 22 47
Decrease/(increase) in stock (9) 203 65
Increase/(decrease) in creditors (265) (253) (67)
Decrease/(increase) in debtors 54 421 435
Cash generated from / (used in) (327) 130 (118)
operations
Tax paid - - -
(327) 130 (118)
4. 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 3rd Floor, 16 Dover Street, London W1S 4LR.
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