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Mediazest PLC

MediaZest Plc - Half-year Report

Market Abuse Regulation (MAR) Disclosure Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

23 December 2019

MediaZest plc

("", the "Company” or the “Group")MediaZest

Unaudited results for the six months ended30 September 2019

(AIM: MDZ), the creative audio-visual company, announces its unaudited interim results for the six months ended .MediaZest30 September 2019

CHAIRMAN’S STATEMENT

Introduction

The Board presents the consolidated unaudited results for the six months ended for and its wholly owned subsidiary company (together the “Group”).30 September 2019MediaZest plcMediaZest International Ltd

Financial Review

Operational Review

As shown in the Financial Review above, the results for the six months to were adversely affected by the difficult business conditions encountered in the current year, by way of comparison with the prior period. This shows a reduction in both revenue and profitability at Group level.30 September 2019

In anticipation of the possibility of this slowdown, the Board implemented a cost cutting programme during January and and reduced the cost base by approximately £200,000 for the current financial year. The impact of this was to reduce ongoing costs and overheads, half of which was experienced in the period, thus having a mitigating effect on the reduction in project activity.February 2019

The impact on the interim results was accentuated by delays to a large project with a , as noted in the Group’s Final Results announcement of . This project is currently progressing towards completion, with the majority of the work falling into October and .UK University28 August 2019November 2019

In light of the above, the Directors believe the results for the six month period ending should be viewed alongside MediaZest’s stronger performance during October and , when the Group generated profit after tax of £44,000, based on revenue of £709,000. Accordingly, key performance indicators for the eight month period to are revenue of £1,652,000, loss at EBITDA of £95,000 and a loss after tax of £184,000.30 September 2019November 201930 November 2019

The Group’s operating subsidiary, , shows corresponding profit after tax of £83,000 and EBITDA of £150,000 within those results before deduction of Plc costs, for the eight months to .MediaZest International30 November 2019

Client Work

The Group continues to service a core of long-standing client accounts including Lululemon Athletica, Tiffany & Co, Kuoni, , HMV and Hyundai, all of which undertook new projects with the Group during the period under review. In addition, our work with continues and the Company has now provided audio visual solutions for a further twelve stores since with a further six scheduled to be completed early in 2020. New clients added to date in the current financial year include Twinings, and Avis Budget Group. In addition, the Group has recently won a high-profile project with a global luxury automotive brand, which is also a new client, and expects to announce further details regarding this project during 2020.Ted BakerPets at HomeBelron1 April 2019

Recurring revenues have diminished by approximately 7% during the period with renewals strong, but with a small number of store closures and projects completing leading to a reduction in retainer income. This has led to an ongoing annualised recurring revenue base total of approximately £650,000 (2018: approximately £700,000). The Board is targeting a run rate of £700,000 worth of recurring revenues by the end of the financial year, which would cover almost 50% of the cost base going into the next financial year.

Administrative costs have been reduced, primarily, by refining the already lean team of dedicated in house staff that the Company employs and by relinquishing the sales office. The Group is also looking to generate more new business in the Corporate and Education markets in order to reduce the reliance on the proportion of business completed in the retail sector. As such, further investment in the sales and marketing process has been made during the period to target these markets.London

The introduction of IFRS16 has had an impact on the way the Company accounts for leases as shown in note 6 to these results.

Outlook

As noted, both in this statement and previously, the market continues to suffer from macroeconomic headwinds particularly in the Retail sector, leading to delayed investment decisions, cost cutting programmes and the termination of projects by clients. Despite these pressures, over the last three months, the Group has seen a marked increase in enquiries and built an encouraging pipeline for 2020. Several existing clients have already indicated plans to extend their engagement with the Company substantially in 2020 via new projects and the expansion of existing programmes.UK

Notwithstanding the disappointing performance in the period, the Board believes that the new calendar year will provide opportunities for the Group to continue the progress it made in the last Financial Year ended .31 March 2019

Feedback from clients on projects delivered remains encouraging and, as such, the quality of the services provided by the Company gives cause for optimism as a continued differentiator in the market. The Directors continue to review costs on a month by month basis and will make further adjustments as necessary based on market conditions as they evolve in the coming period.

Lance O’Neill

Chairman

23 December 2019

   

   

   

   

   

--  Revenue for the period was £943,000 (Restated 2018: £2,136,000)
    --  Gross profit was £475,000 (Restated 2018: £1,049,000), impacted by delay
        to a major project
    --  Sharp improvement in performance post period end with Profit after tax
        in October and November of £44,000 on revenue of £709,000 (2018: loss of
        £12,000 on revenue of £531,000)
    --  Gross margins were consistent at 50% (Restated 2018: 49%)
    --  EBITDA was a loss of £140,000 (Restated 2018: profit of £273,000)
    --  Net loss for the period after taxation of £228,000 (Restated 2018:
        profit of £207,000)
    --  The basic and fully diluted loss per share was  (Restated
        2018: earnings per share )
    --  Overdraft at period end was £6,000 (2018: cash in hand of £12,000). The
        period end cash position is reflective of payments made to suppliers
        prior to the month end and large receipts from customers falling in
        October and November. Cash in hand at close of business 
        was £38,000.0.0163 pence0.0161 pence20 December 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                   FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

                                             Unaudited    Restated       Audited
                                                          Unaudited

                                            Six months   Six months    12 months

                                    Notes    30-Sep-19    30-Sep-18    31-Mar-19

                                                 £'000        £'000        £'000

Continuing Operations

Revenue                                            943        2,136        3,303

Cost of sales                                    (468)      (1,087)      (1,628)

                                          ------------ ------------ ------------

Gross profit                                       475        1,049        1,675

Administrative expenses                          (615)        (776)      (1,546)

                                          ------------ ------------ ------------

EBITDA                                           (140)          273          129

Administrative expenses –                         (40)         (10)         (40)
depreciation & amortisation

                                          ------------ ------------ ------------

Operating (Loss)/Profit                          (180)          263           89

Finance Costs                                     (48)         (56)         (83)

                                          ------------ ------------ ------------

(Loss)/Profit before taxation                    (228)          207            6

Taxation                                             -            -            -

                                              ========     ========     ========

(Loss)/Profit for the period and                 (228)          207            6
total comprehensive loss/income for
the period attributable to the                ========     ========     ========
owners of the parent

Earnings/(Loss) per ordinary 0.1p
share

Basic                                 2      (0.0163)p      0.0161p      0.0004p

Diluted                               2      (0.0163)p      0.0161p      0.0004p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                            AS AT 30 SEPTEMBER 2019

                                      Unaudited       Unaudited         Audited

                                As at 30-Sep-19 As at 30-Sep-18 As at 31-Mar-19

                                          £'000           £'000           £'000

Non-current assets

Goodwill                                  2,772           2,772           2,772

Property, plant and equipment               241              58              62

Intellectual property                         1               2               1

                                   ------------    ------------    ------------

Total non-current assets                  3,014           2,832           2,835

Current assets

Inventories                                  98              97              69

Trade and other receivables                 356             596             481

Cash and cash equivalents                     -              12              24

                                   ------------    ------------    ------------

Total current assets                        454             705             574

Current liabilities

Trade and other payables                (1,012)         (1,175)         (1,017)

Financial liabilities                     (708)           (434)           (548)

                                   ------------    ------------    ------------

Total current liabilities               (1,720)         (1,609)         (1,565)

Net current liabilities                 (1,266)           (904)           (991)

Non-current liabilities

Financial liabilities                     (159)            (17)            (25)

                                   ------------    ------------    ------------

Total non-current liabilities             (159)            (17)            (25)

                                       ========        ========        ========

Net assets                                1,589           1,911           1,819

                                       ========        ========        ========

Equity

Share Capital                             3,656           3,546           3,656

Share premium account                     5,244           5,244           5,244

Other reserves                              146             146             146

Retained earnings                       (7,457)         (7,025)         (7,227)

                                       ========        ========        ========

Total equity                              1,589           1,911           1,819

                                       ========        ========        ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                     FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

                     Share         Share      Share Options     Retained        Total

                   Capital       Premium           Reserves     Earnings       Equity

                     £'000         £'000              £'000        £'000        £'000

Balance at 31        3,546         5,244                146      (7,115)        1,821
March 2018

Adjustment               -             -                  -        (117)        (117)
for adoption
of IFRS15

               -----------  ------------    --------------- ------------  -----------

Balance at 1         3,546         5,244                146      (7,232)        1,704
April 2018
restated

Restated                 -             -                  -          207          207
Profit for
the period

               -----------   -----------        -----------  -----------  -----------

Total                    -             -                  -          207          207
comprehensive
profit for
the period

                   =======       =======           ========      =======       ======

Balance at 30        3,546         5,244                146      (7,025)        1,911
September
2018 restated

                   =======       =======           ========      =======       ======

Loss for the             -             -                  -        (201)        (201)
period

              ------------  ------------ ------------------ ------------ ------------

Total                    -             -                  -        (201)        (201)
comprehensive
loss for the
period

Issue of               110             -                  -            -          110
share capital

Share issue              -             -                  -          (1)          (1)
costs

                   =======      ========          =========      =======       ======

Balance at 31        3,656         5,244                146      (7,227)        1,819
March 2019

                   =======      ========          =========      =======       ======

Adjustment               -             -                  -          (2)          (2)
for adoption
of IFRS 16

                   =======      ========          =========      =======       ======

Balance at 1         3,656         5,244                146      (7,229)        1,817
April 2019
restated

                   =======      ========          =========      =======       ======

Loss for the             -             -                  -        (228)        (228)
period

              ------------ -------------   ---------------- ------------  -----------

Total                    -             -                  -        (228)        (228)
comprehensive
loss for the
period

                   =======      ========          =========      =======       ======

Balance at 30        3,656         5,244                146      (7,457)        1,589
September
2019

                   =======      ========          =========      =======       ======
CONSOLIDATED STATEMENT OF CASH FLOWS

                   FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

                                                 Unaudited   Restated    Audited
                                                            Unaudited

                                                Six months Six months  12 months

                                           Note  30-Sep-19  30-Sep-18  31-Mar-19

                                                     £'000      £'000      £'000

Net cash generated from operating           3           14        138        117
activities

Taxation                                                 -          -          -

                                                ---------- ---------- ----------

Net cash generated from operating                       14        138        117
activities

Cash flows used in investing activities

Purchase of plant and machinery                       (17)       (13)       (30)

Purchase of leasehold improvements                       -        (3)          -

                                                ---------- ---------- ----------

Net cash used in investing activities                 (17)       (16)       (30)

Cash flow from financing activities

Other loans                                           (34)       (14)       (19)

Shareholder loan receipts                              317          -        385

Shareholder loan repayments                          (206)       (52)      (330)

Interest paid                                         (40)       (27)       (58)

Proceeds of share issue                                  -          -        110

Share issue costs                                        -          -        (1)

                                                ---------- ---------- ----------

Net cash used in financing activities                   37       (93)         87

                                                ----------  --------- ----------

Net increase in cash and cash equivalents               34         29        174

                                                ---------- ---------- ----------

Cash and cash equivalents at beginning of            (179)      (353)      (353)
period / year

                                                   =======    =======    =======

Cash and cash equivalents at end of period  4        (145)      (324)      (179)
/ 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  (IASB) and the IFRS Interpretations Committee and there is an
ongoing process of review and endorsement by the . The
financial information has been prepared on the basis of IFRS that the Directors
expect to be applicable as at .

IFRS15 was implemented for the first time for the Financial Year Ended  and the resulting impact was an increase in revenue of £317,000 and an
increase in costs of £200,000 leading to an additional profit of £117,000 for
the period. These adjustments have been reflected in the restated comparative
results for the period ended .

The Board has considered the impact of IFRS16 when drawing up this financial
information, and has made the necessary adjustments.

This interim report does not comply with IAS 34 “Interim Financial Reporting”
(as adopted by the ), 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  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  and  is not audited.

2. Earnings per share

Basic earnings per share is calculated by dividing the loss attributed to
ordinary shareholders of £228,000 (restated 2018: profit of £207,000) by the
weighted average number of shares during the period of 1,396,425,774 (2018:
1,286,425,774). The diluted earnings per share is identical to that used for
basic earnings per share as the warrants or share options are anti-dilutive.International Accounting
Standards BoardEuropean CommissionEuropean Union31 March 202031 March
201930 September 201831 March 201930 September 201930
September 2018
3. Cash generated from/(used in) operations

                                                Unaudited   Restated   Audited
                                                           Unaudited

                                               Six months Six months 12 months

                                                30-Sep-19  30-Sep-18 31-Mar-19

                                                    £'000      £'000     £'000

Profit/(Loss) after tax                             (228)        207         6

Depreciation/amortisation charge                       40         10        40

Finance Costs                                          48         56        83

(Increase)/Decrease in inventories                   (29)        118       148

Increase/(Decrease) in payables                        57      (509)     (776)

Decrease in receivables                               126        256       616

                                                 ========   ========  ========

Net cash generated from operating activities           14        138       117

                                                 ========   ========  ========

4. Cash and cash equivalents

                                                Unaudited              Audited
                                                           Unaudited

                                               Six months Six months 12 months

                                                30-Sep-19  30-Sep-18 31-Mar-19

                                                    £'000      £'000     £'000

Cash held at bank                                       -         12        24

Invoice discounting facility                        (139)      (336)     (203)

Bank overdrafts                                       (6)          -         -

                                                 ========   ========  ========

                                                    (145)      (324)     (179)

                                                 ========   ========  ========

5. Subsequent events

Subsequent to , trade has improved and both October and
 management accounts were profitable at consolidated level.
Profit for the two months was £44,000 after tax, based on revenue of £709,000
during those two months.

6. IFRS 16 Adoption

For the accounting period beginning , IFRS 16 must be applied for
the first time. This replaced IAS 17 and governs how Leases must be treated
and accounted for in the financial statements.

There are two approaches to its adoption, and the Group has chosen to use the
cumulative catch-up approach. This means that the comparative information
presented for the year ended  and for the six months ended  has not been restated and presents the Groups’ Lease, upon the
registered office and headquarters in Woking, under IAS 17 for those periods.

The cumulative effect of the implementation of this accounting standard is
recognised in retained earnings as at  and shown separately on the
Consolidated Statement of Changes in Equity.

IFRS 16 seeks to recognise future liabilities associated with Leases on the
Statement of Financial Position. A corresponding right of use of the asset is
also recognised on the Statement of Financial Position to capture the economic
benefits of the Group’s right to use the underlying leased asset.

Accounting Policy

The Standard recognises right of use of an asset and the associated lease
liabilities at the lease commencement date. The liability is calculated as the
net present value of the lease payments over the lifetime of the lease. This
calculation uses the discounted interest rate implicit in the lease which is
not easily established and hence is replaced with the Group’s incremental
borrowing rate. This has been assumed at 10% for the one relevant lease based
on the Group’s other rates of borrowing.

This liability is then measured at amortised cost and increased by the
interest charge and decreased by lease payments as they are made.

Given that the lease in question for the Group is a 5-year rental lease on
premises with no break clause, the lease term used for all calculations is 5
years.

On transition to IFRS 16 the right of use asset is calculated retrospectively
using the Group’s incremental borrowing rate. The asset is then depreciated on
a straight-line basis over the 5 years of the lease.

The impact of IFRS 16 on this financial information is a net decrease in
equity of £2,000.



Due to the nature of the right of use asset, this is presented in “Property,
Plant and Equipment”, and was equal to £179,000 at .

Lease liabilities are presented within Financial Liabilities on the Statement
of Financial Position at  and was equal to £184,000.

7. Distribution of the Half-Yearly Report

Copies of the Half-yearly Report will be available to the public from the
Company’s website, , and from the Company Secretary at the
Company's registered address at Unit 9, , ,
Woking, Surrey, GU21 5JY.


Enquiries:

MediaZest Plc                  0845 207 9378
Geoff Robertson
Chief Executive Officer

SP Angel Corporate Finance LLP 020 3470 0470
Nominated Adviser
 / 

Hybridan LLP                   020 3764 2341
Broker
Claire Noyce


Notes to Editors:

About MediaZest

 is a creative audio-visual systems integrator that specialises in
providing innovative marketing solutions to leading retailers, brand owners
and corporations, but also works in the public sector in both the  and
Education markets. The Group supplies an integrated service from content
creation and system design to installation, technical support, and
maintenance.  was admitted to the  AIM market
in . For more information, please visit .30 September 2019November 20191 April 201931 March 201930
September 20181 April 201930 September 201930 September 2019February 2005www.mediazest.comwww.mediazest.comWoking Business ParkAlbert DriveDavid HignellStephen WongMediaZestNHSMediaZestLondon Stock Exchange's
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