Mediazest (LON:MDZ) – CORP: Final Results Mar-16
Market Cap: £1.8m; Current Price: 0.145p
Revenue increases to £3.1m in FY16
Revenue of £3.1m in FY16 compared with £2.5m in FY15.
LBITDA of £81k, including non-cash share option charge of £139k in FY16 compared to LBITDA of £625k in 2015.
Second Rockar Hyundai dealership at Westfield Stratford completed in December 2015.
New clients taken on during the period include: Specsavers, Adidas, Diesel, Mamas and Papas, UGG (Deckers Brands), Farrow & Ball and John Lewis Partnership.
Additional projects post period end include: Rockar, Hyundai, Mamas and Papas, O2, TNS, HMV, Kuoni, Ted Baker, and Diesel. New client wins post period end include Virgin Media and Halfords.
The Company referred to two potentially transformative projects in the April 2016 Trading Update. Both projects continue to be in progress, albeit delayed and the Company now expects to have greater visibility as to timing of these in Q317.
NORTHLAND CAPITAL PARTNERS VIEW: The focus on recurring revenues and new business is improving Media Zests metrics during FY16. Post period end the Company has experienced positive trading to date despite the uncertainty that Brexit is perceived to have brought to the retail sector. Approximately £2million in new revenue has been written post period end and the Company is only now midway through Q217.
Edenville Energy (LON:EDL) – CORP: Share Capital Reorganisation
Market Cap: £2.3m; Current Price: 0.019p
Notice of GM issued
A Circular and Notice of GM is being sent to shareholders to convene a GM on 30/08/16 to propose resolutions to sub-divide and consolidate the issued share capital of the Company.
Management Resource Solutions (LON:MRS) – CORP: Proposed acquisition
Market Cap: £6m; Current Price: 16.5p
Proposed acquisition of assets of SubZero Group Ltd for A$6.12m
Exclusive conditional Asset Sale Agreement (ASA) with SubZero Group Ltd (SZG), until 30 September 2016 for a total consideration of A$6.12m, subject to certain key conditions comprising; A$1m cash payment on completion, A$0.5m in cash payable 12 months after date of completion, issue of 7.2m new consideration shares at 12.75p per share and the assumption of approximately A$2.85m of equipment finance liabilities and employee benefits.
The acquisition makes strategic sense, as SZG a mining service business based in the Hunter Valley, New South Wales, is aligned with MRS’ existing offerings of Project Management, Labour Hire, Wet and Dry Hire and Maintenance. Furthermore, the proposed assets being acquired from SZG had a carrying value of A$9.5m for the year ended 30 June 2015 and pro-forma revenues to 30 June 2016 of c. A$40m. Which implies the consideration is a mere 0.15x pro-forma revenues and 0.7x the carrying value of the assets.
The deal significantly increases MRS’ revenue and asset base. Pro-forma revenue to 30 June 2016 for the combined MRS, Bachmann and SZG are c. A$80m, a doubling of revenues for a combined MRS and Bachmann of c. A$40m.
Completion of the deal is expected to occur on or around 30 September 2016. MRS has received an offer of finance of A$4.2m from Westpac Banking Corporation subject to certain conditions including the availability of up to A$4m of additional funding from other sources. Additional funding to enable completion and to provide the company with additional working capital may be sourced from debt or additional equity financing between execution of the ASA and completion.
NORTHLAND CAPITAL PARTNERS VIEW: The deal looks a good deal for MRS shareholders. Again as with the Bachmann deal it provides a significant step forward for MRS. It further diversifies the business, gives it additional scale, as evidenced by the doubling of pro-forma revenues to A$80m and makes economic sense for shareholders. It should be well received by the market in our view.