Final Results

Zest Group PLC
28 March 2008



28 March 2008

                     ZEST GROUP PLC ('Zest' or the 'Group')

           Preliminary Results  for the year ended 30 September 2007



CHAIRMAN'S STATEMENT

I am pleased to present the results of the Group for the year ended 30 September
2007.

During the period the Group had turnover of £2.5 million (2006: £1.4 million)
and a loss before taxation of £1.3 million (2006: loss £798,000). There was a
loss per share of 0.77p (2006: loss per share 0.61p).

During the period the Greensleeves business continued to produce all of the
Group's revenues.  Despite the introduction of a number of initiatives designed
to exploit the opportunities from the Greensleeves business since its
acquisition in March 2006, the business was not producing the returns to
shareholders that Zest had originally  expected, albeit against difficult and
changing market conditions in the international music sector.

Therefore, following a strategic review of the Greensleeves business, and taking
into consideration the prevailing market conditions, particularly in the US
music market which continued to worsen during the period, the decision was taken
to dispose of the Greensleeves business.

Sale of Greensleeves business

On 25 January 2008 the Company entered into an agreement for the disposal of its
Greensleeves business to VP Records (UK) Limited and the disposal was
subsequently approved by shareholders at a General Meeting on 13 February 2008
and completed on 18 February 2008. The total consideration for the disposal was
£3,100,000 in cash, £100,000 of which was on a deferred basis.

The Greensleeves business was acquired on 31 March 2006 by the Company for a
consideration of £3,250,000, comprising of a cash consideration of £3,000,000
and the issue of 8,333,334 Ordinary Shares which were issued at 3 pence per
share. On 19 June 2007, the Company announced that it had reached a settlement
with the vendors of the Greensleeves business in relation to the breach of
certain specified warranties given at the time of the acquisition. The gross
settlement for these breaches was £455,687.

The proceeds from the disposal were used by Zest to repay its borrowings of
approximately £1.8 million and its creditors and to provide additional working
capital for the Company.

Operational review

During the year the Group has continued to seek to exploit the publishing and
recording rights arising from its retained roster of artists.

Tara Chinn

Additional recording on Tara's debut album 'Night Racing', produced and
co-written by Tony Fennell and mixed by Grammy award winning Hugh Padgham, was
completed during summer of 2007. On 12 December 2007 Zest signed a physical and
digital licence agreement with leading Australian based independent music
distributor Amphead to launch Tara's album in Australia which goes on sale there
on 29 March 2008.  The launch is being co-ordinated with Tara's promotional trip
which includes live dates and a series of TV commercials to act as springboard
to launch her career and develop other markets including Asia. Zest owns 100% of
the recording masters and Tara's music publishing rights.

Nasio Fontaine

In June 2007, Zest Group released a compilation album under the Greensleeves
label 'Rise Up' which incorporated tracks from Nasio's first three albums and
'Universal Cry'. As at 30 September 2007, total sales for both 'Universal Cry'
and 'Rise Up' are in excess of 30,000 since their launch. Nasio is currently
working on his next album which is expected to be recorded and released during
2008.  There are also further plans to re-release some of Nasio's earlier
recordings during 2008.  Zest owns 100% of the recording masters and Nasio's
music publishing rights.

Tony Fennell

A songwriter and record producer signed to Zest, Tony co-wrote 11 of the 13
songs on Tara Chinn's debut album 'Night Racing' which he also produced. Tony
will accompany Tara to Australia where he will act as MD of her band and work
closely with Amphead. Tony Fennell and Richard Griffiths, Chairman of Zest and
also a songwriter signed to Zest, are working on further writing projects with
new artists which are currently expected to feature in the second half of 2008.

Board changes

Following the disposal of the Greensleeves business, Marcus Lee and Grant Gadzig
stepped down as Finance Director and Non-executive Director of the Company
respectively and the Board would like to thank them both again for their
contributions to the Company.

Outlook

The Company will continue to seek to optimise the value of existing artists and
where the opportunity arises, seek to add further rights by signing new artists
and songwriters.  In addition, Zest continues to look for potential acquisition
opportunities.

I would like to thank the staff and our shareholders for their continued
support.


Richard Griffiths
Chairman
28 March 2008



                                                               Note                2007             2006           
                                                                                               (restated)
                                                                                  £'000            £'000

Turnover                                                                          2,513            1,411

Cost of sales                                                                   (1,452)            (828)
Gross profit                                                                      1,061              583
                                                                                  (177)            (113)

Administrative expenses - amortisation of goodwill
Other administrative expenses                                                   (2,065)          (1,192)
                                                                                (2,242)          (1,305)

Operating loss                                                                  (1,181)            (722)

Net interest                                                                      (153)             (76)

Loss on ordinary activities before taxation                                     (1,334)            (798)

Taxation                                                         2                    -               22

Loss on ordinary activities after taxation and retained loss                    (1,334)            (776)

Loss per ordinary share
- basic and diluted                                              3              (0.77)p          (0.61)p



All of the operations are classed as continuing as the disposal of the
Greensleeves business was not completed until more than three months after 30
September 2007.




                                                                                     2007          2006           
                                                                                              (restated)
                                                                                    £'000         £'000

Fixed assets
Intangible assets                                                                   3,005         3,599
Tangible assets                                                                       685           694
                                                                                    3,690         4,293

Current assets
Stocks of finished goods                                                              429           422
Debtors                                                                             1,983         2,097
Cash at bank and in hand                                                               32            55

                                                                                    2,444         2,574

Creditors: amounts falling due within one year                                    (3,086)       (2,294)

Net current (liabilities)/assets                                                    (642)           280

Total assets less current liabilities                                               3,048         4,573

Creditors: amounts falling due after more than one year                           (1,352)       (1,602)

Net assets                                                                          1,696         2,971

Capital and reserves
Called up share capital                                                               434           434
Share premium account                                                               3,598         3,598
Share based payment reserve                                                           126            67
Profit and loss account                                                           (2,462)       (1,128)
Shareholders' funds                                                                 1,696         2,971






                                                         Note                        2007          2006           
                                                                                              (restated)
                                                                                    £'000         £'000

Net cash outflow from operating activities               4                           (509)         (834)

Returns on investments and servicing of finance
Interest paid                                                                        (154)          (83)

Interest received                                                                        1             7
Net outflow from returns on investments and service of                               (153)          (76)
finance

Capital expenditure and financial investments
Payments to acquire tangible fixed assets                                             (12)         (694)

Net cash outflow from capital expenditure and financial                               (12)         (694)
investment


Acquisitions and disposals

Purchase of subsidiary undertaking                                                       -        (3,478)

Cash acquired with subsidiary undertaking                                                -           273
Adjustment to purchase price of subsidiary undertaking                                 417             -
Net cash inflow/(outflow) from acquisitions and                                        417       (3,205)
disposals

Net cash outflow before financing                                                    (257)       (4,809)

Financing
Issue of shares                                                                          -         2,500
Share issue costs                                                                        -          (16)

Bank loan received                                                                       -         1,854
Repayment of bank loan                                                               (250)             -
Other loan receipt                                                                     484             -
Net cash inflow from financing                                                                     4,338
                                                                                       234

Decrease in cash                                         5                            (23)         (471)


                                                                                         2007                  2006
                                                                                                         (restated)
                                                                                        £'000                 £'000

Loss for the financial year and total recognised gains and losses for                 (1,334)                 (776)
the year
Prior year adjustment                                                                    (67)                     -
                                                                        ---------------------  --------------------
Total gains and losses recognised since the last financial statements                 (1,401)                 (776)
                                                                               ==============        ==============

     
1    BASIS OF PREPARATION

The financial statements are prepared under the historical cost convention and
in accordance with applicable United Kingdom accounting standards.

The principal accounting policies of the Group remain unchanged from those set
out in the Group's 2006 annual report and financial statements other than as
detailed below.

CHANGES IN ACCOUNTING POLICY

In preparing the financial statements for the current year, the Group has
adopted the following Financial Reporting Standards:

FRS 20 'Share-based payment (IFRS 2)'

FRS 20 'Share-Based Payment (IFRS 2)' requires the recognition of equity-settled
share-based payments at fair value at the date of the grant. Prior to the
adoption of FRS 20, the Group did not recognise the financial effect of
share-based payments until such payments were settled.

In accordance with the transitional provisions of FRS 20, the Standard has been
applied retrospectively to all grants of equity instruments after 7 November
2002 that were unvested as of 1 October 2006.

This change in accounting policy has resulted in a prior year adjustment for the
Group. For the year ended 30 September 2006, the change in accounting policy has
resulted in a net decrease in retained profit of £67,000. The balance sheet at
30 September 2006 has been restated to reflect the inclusion of a share based
payment reserve of £67,000. The profit and loss account for the year ended 30
September 2006 has been adjusted to reflect the additional share based payment
charge of £67,000.  For the year ended 30 September 2007 the change in
accounting policy has resulted in a net charge to the profit and loss account of
£59,000. At 30 September 2007, the share based payment reserve amounted to
£126,000.
     
2    TAXATION ON LOSS ON ORDINARY ACTIVITIES

There is no tax charge or credit for the year ended 30 September 2007.  The tax
credit for the year ended 30 September 2006 represents UK tax losses carried
back to prior periods.

Unrelieved tax losses of approximately £2,100,000 (2006 : £990,000) remain
available to offset against future taxable trading profits.  The unprovided
deferred tax asset at 30 September 2007 amounts to £588,000 (2006 : £297,000).


taxation on loss on ordinary activities (CONTINUED)

The tax assessed for the year differs from the standard rate of corporation tax
in the UK as follows:
                                                                                                   
                                                                                      2007         2006
                                                                                              (restated)
                                                                                     £'000        £'000

Loss on ordinary activities before tax                   '                         (1,334)         (731)
Loss on ordinary activities multiplied by standard rate                              (400)         (219)
of corporation tax in the UK of 30%

Effect of
Expenses not deductible for tax purposes                                                60            34
Carry back to prior periods                                                              -          (22)
Deferred tax asset not recognised                                                      340           185
Current tax credit for year                                                              -          (22)


     
3    LOSS PER SHARE

The calculation of the basic loss per share is based on the loss on ordinary
activities after tax of £1,334,000 (2006: restated £776,000) divided by the
weighted average number of ordinary shares in issue during the year of
173,619,050 (2006: 127,911,287).  The impact of the share options on the loss
per share is anti-dilutive.


     
4    RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

Group                                                                                                
                                                                                       2007          2006
                                                                                               (restated)
                                                                                      £'000         £'000

Operating loss                                                                      (1,181)         (722)
Depreciation                                                                             21            12
Amortisation                                                                            177           113

Increase in stocks                                                                      (7)          (64)
Decrease/(increase) in debtors                                                          114         (562)
Increase in creditors                                                                   308           322
Equity settled share based payments                                                      59            67
Net cash outflow from operating activities                                            (509)         (834)





     
5    RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)

Group                                                                                                
                                                                                       2007          2006
                                                                                      £'000         £'000

Decrease in cash for the year                                                          (23)         (471)
Bank loans advanced                                                                       -       (1,854)
Other loans advanced                                                                  (484)             -
Repayment of bank loans                                                                                 -
                                                                                        250
Change in net funds resulting from cashflows                                          (257)       (2,325)
Net (debt)/funds brought forward                                                    (1,799)           526
Net (debt) carried forward                                                          (2,056)       (1,799)


     
6    ANALYSIS OF CHANGES IN NET DEBT

Group                                                             At 1.10.2006       Cash flow       30.9.2007
                                                                         £'000           £'000           £'000

Cash at bank and in hand                                                    55            (23)              32
Bank loans                                                             (1,854)             250         (1,604)
Other loans                                                                  -           (484)           (484)
                                                                       (1,799)           (257)         (2,056)



     
7    PUBLICATION OF NON STATUTORY ACCOUNTS

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.

The summarised consolidated balance sheet at 30 September 2007 and the
summarised consolidated profit and loss account, summarised consolidated cash
flow statement, the summarised statement of total recognised gains and losses
and associated notes for the year then ended have been extracted from the
Group's 2007 statutory financial statements upon which the auditors opinion is
unqualified and does not include any statement under Section 237 of the
Companies Act 1985.

The accounts for the year ended 30 September 2007 will be posted to shareholders
and laid before the company at the Annual General Meeting on 9 May 2008. Copies
will also be available from Zest Group plc's Registered Office: Kitwell House,
The Warren, Radlett, Hertfordshire, WD7 7DU and via the website
(www.zestmusic.com) in accordance with AIM Rule 26.


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