Mediazest PLC (LON:MDZ) shares lost more than a fifth of their value after the creative audio-visual company issued a profit warning.
The warning came just over a month after the in-store audio-visual kit provider tapped the market for £110,000, placing shares at 0.1p each; the shares now trade at 0.07p, having closed at 0.09p on Friday.
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Several clients are delaying projects and investment decisions, particularly in the retail sector, the result of which is that the group’s trading results for the second half of the financial year (to 31 March 2019) are expected to be lower than the first half of the year.
As a result, MediaZest is now expecting to be profitable at the group level in EBITDA (underlying earnings) terms and to make a small loss after tax in the current financial year.
Following the collapse into administration of HMV, a long-standing client, the company has made a bad debt provision of £16,000 against outstanding invoices representing amounts due no more than 30 days at the time of administration. The group has continued to work with the new owners of HMV and expects to generate additional revenues from this relationship.
The company said its new business efforts have delivered progress compared to the prior year and the board is confident that this, combined with recurring revenue contracts, will provide the group with a base for further growth in the next twelve months.