Half Yearly Report

RNS Number : 7913U

Zest Group PLC

30 June 2009

Zest Group plc

('Zest' or 'the Group')

Interim Results

for the period ended 31 March 2009

Zest Group plc (AIM:ZEST), announces its interim results for the six months ended 31 March 2009.

During the period the Group made a loss before taxation of £113,000 (2008: loss £341,000). There was a loss per share from continuing operations of 0.01p (2008: loss per share 0.20p).

Current trading

During the period the Group has continued to seek to exploit the publishing and recording rights from Tara Chinn, Nasio Fontaine and Tony Fennell.

The Board is currently considering a proposed UK/European release for Tara Chinn's debut album 'Night Racing' through an independent marketing company and expects to make a decision shortly.

Zest owns 100% of the recording and publishing rights of all five Nasio Fontaine's albums and is currently negotiating a new worldwide license deal. In addition, VP Records/Greensleeves will be releasing a 'Best of' Nasio album with a DVD late in the summer of 2009. To support this release, Nasio is being asked to tour in the USA and Europe.

A songwriter and record producer signed to Zest, Tony Fennell, has a song on hold with Disney Records and has a number of other covers currently being considered by major record labels. Tony is also recording and writing an album with a mainstream female artist, who for legal reasons cannot be named at this time.

Whilst the Board continues to support these artists and is confident that the Group will receive some positive financial benefit from these relationships, in the current economic climate the quantum and timing of this benefit is subject to significant uncertainty. Accordingly, in order to take a prudent view of the prospects, the Board agreed to make a full provision against the recoverability of these amounts in the financial year to 30 September 2008.

Board changes

On 13 January 2009 Jon Crawley resigned from the Board to pursue other business interests. The Board would like to thank him again for his contribution to the Group.

Outlook

The Group 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 and to explore alternative routes to securing shareholder value.

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

Richard Griffiths

Chairman

30 June 2009

ZEST GROUP PLC

UNAUDITED CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 31 MARCH 2009

	Note	Six months ended 31 March 2009	Six months ended 31 March 2008	Year ended 30 September 2008
		£'000	£'000	£'000

Administrative expenses
- amortisation of intangibles		-	(10)	(20)
- impairment of intangible assets		-	-	(78)
- impairment of advance payments to artists		-	-	(533)
- other administrative expenses		(117)	(285)	(469)

Total administrative expenses		(117)	(295)	(1,100)

Operating loss from continuing operations		(117)	(295)	(1,100)

Finance costs		4	(46)	(180)

Loss from continuing operations for the period before taxation		(113)	(341)	(1,280)

Taxation expense		-	-	-
Loss from continuing operations		(113)	(341)	(1,280)

Loss from discontinued operations		-	(738)	(475)
Loss for the period		(113)	(1,079)	(1,755)

Basic and diluted loss per share from total operations	4	(0.01)p	(0.62)p	(1.01)p
Basic and diluted loss per share from continuing operations	4	(0.01)p	(0.20)p	(0.74)p
Basic and diluted loss per share from discontinued operations	4	- p	(0.42)p	(0.27)p

ZEST GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 MARCH 2009

	Share capital	Share premium	Share based payment reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000

At 1 October 2007	434	3,598	126	(2,304)	1,854
Share based payment	-	-	40	-	40
Loss for the year	-	-	-	(1,755)	(1,755)
At 30 September 2008	434	3,598	166	(4,059)	139
Share based payments	-	-	11	-	11
Loss for the period	-	-	-	(113)	(113)

At 31 March 2009	434	3,598	177	(4,172)	37

ZEST GROUP PLC

UNAUDITED CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2009

	Note	31 March 2009	31 March 2008	30 September 2008
		£'000	£'000	£'000
ASSETS

Non-current assets
Intangible assets		-	88	-
Property, plant and equipment		1	1	1

		1	89	1

Current assets
Trade and other receivables		76	595	133
Cash and cash equivalents		53	333	62
Total current assets		129	928	195

Total assets		130	1,017	196

EQUITY AND LIABILITIES

Current liabilities
Trade and other payables		93	216	57
Total liabilities		93	216	57

Equity
Share capital	5	434	434	434
Share premium		3,598	3,598	3,598
Share based payment reserve		177	152	166
Retained earnings		(4,172)	(3,383)	(4,059)
Equity shareholder's funds		37	801	139

Total equity and liabilities		130	1,017	196

ZEST GROUP PLC

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 31 MARCH 2009

	Six months ended 31 March 2009	Six months ended 31 March 2008	Year to 30 September 2008
	£'000	£'000	£'000

Operating activities Continuing activities
Loss after taxation	(113)	(341)	(1,280)
Finance costs	-	49	187
Finance income	(4)	(4)	(7)
Amortisation of intangibles	-	10	20
Depreciation	-	-	1
Impairment of intangible fixed assets	-	-	78
Decrease in trade and other receivables	57	46	608
Increase/(decrease) in trade and other payables	36	(164)	(323)
Equity settled share based payments	11	26	40
Net cash outflow from operating activities from continuing activities	(13)	(378)	(676)

Discontinued operations
Net cash inflow from operating actives from discontinued operations	-	519	519

Total cash (outflow)/inflow from operating activities	(13)	141	(157)
Investing activities Continuing activities
Purchase of property, plant and equipment	-	-	(1)
Finance cost	-	(49)	(49)
Finance income	4	4	7
Net cash inflow/(outflow) from investing activities	4	(45)	(43)

Discontinued operations
Net cash inflow from investing activities from discontinued operations	-	1,866	2,029

Net cash inflow from investing activities	4	1,821	1,986

Cash flow from financing activities
Continuing operations
Repayment of loans	-	(1,661)	(1,799)

Net change in cash and cash equivalents	(9)	301	30

Cash and cash equivalents at beginning of period	62	32	32

Cash and cash equivalents at end of period	53	333	62

ZEST GROUP PLC

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 31 MARCH 2009

1 GENERAL INFORMATION

The financial information for the period ended 31 March 2009 does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The figures for the year ended 30 September 2008 have been extracted from the 2008 statutory financial statements prepared under International Financial Reporting Standards as adopted by the European Union. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2) of the Companies Act 1985.

2 BASIS OF PREPARATION

This consolidated financial information for the six months ended 31 March 2009 has been prepared in accordance with IAS34, 'Interim Financial Reporting' as adopted by the European Union. The half yearly consolidated financial report should be read in conjunction with the annual financial statements for the year ended 30 September 2008, which have been prepared in accordance with IFRS as adopted by the European Union.

This interim financial information has been prepared using the accounting policies set out in the Group's 2008 statutory accounts.

Copies of the interim results for the six months are being sent to all shareholders. A copy can also be found on the Company's website at www.zestmusic.com

3 SEGMENTAL REPORTING

(a) By business segment (Primary segment)

As defined under International Accounting Standard 14 (IAS 14) the only material business segment the Group has is that of music publishing and distribution.

(b) By Geographical Segment (Secondary segment)

Under the definitions contained in IAS 14 the only material geographic segment the Group operates in is the United Kingdom.

4 LOSS PER SHARE

The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

	Six months ended 31 March 2009	Six months ended 31 March 2008	Year ended 30 September 2008

Loss for the period from total operations (£'000)	(113)	(1,079)	(1,755)

Weighted average number of 0.25p ordinary shares	173,619,050	173,619,050	173,619,050

Loss per share from total operations	(0.01)p	(0.62)p	(1.01)p

Loss for the period from continuing operations (£'000)	(113)	(341)	(1,280)

Weighted average number of 0.25p ordinary shares	173,619,050	173,619,050	173,619,050

Loss per share from continuing operations	(0.01)p	(0.20)p	(0.74)p

Loss for the period from discontinued operations (£'000)	-	(738)	(475)

Weighted average number of 0.25p ordinary shares	173,619,050	173,619,050	173,619,050

Loss per share from discontinued operations	-p	(0.42)p	(0.27)p

The share options are anti-dilutive.

5 SHARE CAPITAL

	Unaudited 31 March 2009	Unaudited 31 March 2008	Audited 30 September 2008
	£'000	£'000	£'000
Authorised
4,000,000,000 ordinary shares of 0.25p	10,000	10,000	10,000

Allotted, issued and fully paid
173,619,050 (31 March 2008 and 30 September 2008: 173,619,050) ordinary shares of 0.25p	434	434	434