Final Results and Annual Report and Accounts
6 September 2012
MediaZest plc
("MediaZest", the "Company" or the "Group"; AIM:MDZ)
Final Results for the Year Ended 31 March 2012
CHAIRMAN'S STATEMENT
Introduction
The results for MediaZest plc for the year ended 31 March 2012 incorporate the
results of its subsidiaries, all of which are wholly owned.
Highlights
Commercial
MediaZest Ventures added a number of high quality new clients, including
Samsung (through their agency Cheil), Serco, Topshop and Boots (through
Bezier), and continued to work with long term clients such as JD Sports and
Footlocker.
Touch Vision was able to win several strong pieces of business including an
order in excess of £300,000 from an existing client, and its retail
customers, such as HMV and Kuoni, continue to be a significant part of the
business.
The Group is pleased to announce over £250,000 of new project work won in
the first half of the new financial year on top of existing contractual
income.
Financial
Turnover for the year was £2,521,000 (2011: £1,918,000)
Cost of sales was £1,394,000 (2011: £957,000)
Loss for the year, after taxation, of £424,000 (2011: £457,000) after
finance costs of £104,000 (2011: £83,000) and having paid administrative
expenses of £1,447,000 (2011: £1,335,000)
The basic loss and diluted loss per share was 0.002 pence (2011: 0.002
pence)
The Group had cash in hand of £88,000 (2011: £365,000) at the year end
The Group had an invoice discounting facility over the debtors of Touch
Vision of which £84,000 (2011: £214,000) was in use at 31 March 2012. As at
31 March 2012, the Group has a current maximum limit of £350,000 under the
existing invoice discounting facility
As at 31 March 2012 the Group also had loans from shareholders of £530,000
(2011: £505,000)
The Group raised £160,000 before expenses in February 2012 from both
existing and new shareholders
The Board has taken steps to reduce annual overhead by over £200,000
following the review of year end 31 March 2012 performance
Business overview
The Group operates two trading divisions: Touch Vision (TV) and MediaZest
Ventures (MV) trading as a division of TV.
TV trades as an Audio Visual supply and installation company whilst MV operates
as a `digital out of home' creative agency.
Group revenue was £2,521,000 (2011 - £1,918,000) with revenue in the first half
of the year showing a strong improvement (£1,746,000 versus £1,080,000 in the
prior comparative period).
Revenue in the second half of the year was less than anticipated due, in part,
to disappointing trading over the Christmas period. However, there was an
improvement in gross profit margins in the second half of the year as a higher
proportion of installation, maintenance and consulting services rather than
equipment sales constituted the larger part of the period's revenue in
comparison to the previous period.
Overall, the Company has posted slightly improved year on year results with a
reduced loss which at the EBITDA level, excluding £31,000 of one-off costs that
related to old lease agreements that the Group inherited upon acquiring Touch
Vision several years ago and which expired during the year, was £264,000 (2011
£354,000).
The Board had targeted a return to improved turnover levels whilst maintaining
the lower cost base that had been achieved in the previous year. The Board's
strategy continued to be that of driving turnover by concentrating on and
increasing the higher margin business achievable through MV whilst both
maintaining and expanding revenue through the Education Framework agreements
that TV became a participant of in November 2010.
The Group raised £160,000 before expenses in February 2012 from both existing
and new shareholders, the proceeds of which were to be applied towards
improving the working capital resources available to the Group's operating
subsidiary and its two operating divisions.
MediaZest Ventures Division
MediaZest Ventures continues to provide the Group with its largest and most
attractive opportunities. However, operating in the retail sector, projects
continue to be under budget pressure although there have been positive signs of
growth with a number of large scale future projects being discussed with
clients.
During the year, MediaZest Ventures added a number of high quality new clients,
including Samsung (through their agency Cheil), Serco, Topshop and Boots
(through Bezier), and continued to work with long term clients such as JD
Sports and Footlocker.
Touch Vision
The Education market, through purchasing consortia, remained subdued during the
year but TV was able to win several strong pieces of business including an
order in excess of £300,000 from an existing client.
Touch Vision's retail customers, such as HMV and Kuoni, continue to be a
significant part of the business. These clients continue to provide excellent
revenue for the company, in particular, with regard to the supply of audio
technology to HMV which assisted them in marketing their headphones across 200
new displays over Christmas 2011.
The more traditional corporate market is also providing opportunities again for
the company as clients look for better value solutions and reliable systems
providers. This has helped the company win a number of new clients including
ETC Venues in the conference facilities market.
Outlook
Despite a tough start to the 2013 financial year, the Group continues to add
new clients and develop opportunities with significant long term potential. The
main difficulties faced by the Group continue to be uncertainty in the economic
climate and continued pressure on client marketing budgets at this time, which
makes the scale of future revenues particularly difficult to predict.
The Group now has a large number of blue chip retailers and brands as customers
and in the fullness of time it expects this client base to deliver larger
revenues. Client retention remains strong and the Board is also encouraged by
the quality of new clients and opportunities being won.
Against this background, costs are constantly monitored and reduced, where
appropriate, in an effort to reach profitability as soon as possible. The Board
has taken steps to reduce annual overhead by over £200,000 following the review
of year end 31 March 2012 performance. These cost reductions will begin to come
into effect in the next quarter.
In terms of new business wins, the Group is pleased to announce over £250,000
of new project work won in the first half of the new financial year on top of
existing contractual income. This has included work from existing customers in
the Education, Retail and Corporate sectors and the Board is pleased to advise
that new customers, including Samsung (through their agency Cheil), Adidas
(through agency Savvy Sport), Caffe Nero, Topshop and Serco, have been added.
The Group continues to pioneer new uses for existing technologies such as the
virtual mannequin which generates considerable interest. It expects to produce
further such products in the coming 12 months which will help provide a unique
selling point for its services and also enable it to improve overseas revenues.
The Group continues to experience interest from potential clients all over the
world. It is actively seeking new ways to capitalise on these opportunities
including the supply of unique MediaZest designed products which do not
necessarily rely on our own installation services, which are difficult to
provide in overseas regions without the support of local representative
offices.
Lance O'Neill
Chairman
ENQUIRIES:
Geoff Robertson 020 7724 5680
Chief Executive Officer
MediaZest Plc
Gavin Burnell/Edward Hutton 020 7796 8800
Nominated Adviser
Northland Capital Partners Limited
Claire Noyce / Deepak Reddy 020 7947 4350
Broker
Hybridan LLP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2012
Note 2012 2011
£'000 £'000
Continuing operations
Revenue 2,521 1,918
Cost of sales (1,394) (957)
Gross profit 1,127 961
Administrative expenses (1,447) (1,335)
Operating loss 2 (320) (374)
Finance costs (104) (83)
Loss on ordinary activities before taxation (424) (457)
Tax on loss on ordinary activities - -
Loss and total comprehensive loss on ordinary (424) (457)
activities after taxation
Loss per ordinary 0.1p share
Basic 3 (0.002p) (0.002p)
Diluted 3 (0.002p) (0.002p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2012
2012 2011
£'000 £'000
Non-current assets
Goodwill 2,772 2,772
Property, plant and equipment 97 32
Total non-current assets 2,869 2,804
Current assets
Inventories 106 120
Trade and other receivables 270 523
Cash and cash equivalents 88 365
Total current assets 464 1,008
Current liabilities
Trade and other payables (789) (1,008)
Financial liabilities (547) (521)
Total current liabilities (1,336) (1,529)
Net current liabilities (872) (521)
Non-current liabilities
Financial liabilities (8) (25)
Total non-current liabilities (8) (25)
Net assets 1,989 2,258
Equity
Share capital 2,587 2,507
Share premium account 4,004 3,929
Share options reserve 7 7
Retained earnings (4,609) (4,185)
Total equity 1,989 2,258
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2012
Share Share Share Retained Total
Options
Capital Premium Reserve Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2010 2,428 3,580 7 (3,728) 2,287
Loss for the period - - - (457) (457)
Total comprehensive income for - - - (457) (457)
the year
Issue of share capital 79 361 - - 440
Share issue costs - (12) - - (12)
Balance at 31 March 2011 2,507 3,929 7 (4,185) 2,258
Loss for the year - - - (424) (424)
Total comprehensive income for - - - (424) (424)
the year
Issue of share capital 80 80 - - 160
Share issue costs - (5) - - (5)
Balance at 31 March 2012 2,587 4,004 7 (4,609) 1,989
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2012
Note 2012 2011
£'000 £'000
Net cash used in operating activities (141) (423)
Cash flows used in investing activities
Purchase of plant and equipment (62) (4)
Purchase of leasehold improvements (4) -
Net cash used in investing activities (66) (4)
Cash flow from financing activities
Bank loan - 50
Repayment of borrowings (16) (9)
Shareholder loans 50 325
Shareholder repayments (25) (110)
Interest paid (104) (83)
Proceeds of share issue 160 440
Share issue costs (5) (12)
Net cash generated from financing 60 601
activities
Net (decrease)/increase in cash and cash (147) 174
equivalents
Cash and cash equivalents at beginning of 151 (23)
year
Cash and cash equivalents at end of the 4 4 151
year
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2011 and 31 March 2012 within
the meaning of section 434 of the Companies Act 2006. Statutory accounts for
the year ended 31 March 2011 have been delivered to the Registrar of Companies
and those for the year ended 31 March 2012 will be delivered in due course.
The auditors have reported on the accounts for the year ended 31 March 2011;
their report was unqualified and did not include references to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report, and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
The auditors have reported on the statutory accounts for the year ended 31
March 2012; their report was unqualified, and did not include references to any
matters to which the auditors drew attention by way of emphasis without
qualifying their report, and did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The financial information has been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union and as
regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
The financial statements have been prepared under the historic cost convention
unless otherwise stated.
Going concern
The Directors have carefully considered the going concern assumption on the
basis of financial projections and the factors outlined below.
The Directors have considered financial projections based upon known future
invoicing, existing contracts, pipeline of new business and the increasing
number of opportunities it is currently working on, particularly in the retail
sector. In addition, these forecasts have been considered in light of the
ongoing economic difficulties in the UK and global economy, previous experience
of the markets in which the company 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 company will generate sufficient
cash resources to meet its liabilities as they fall due over the 12 month
period from the date of the approval of the accounts.
The Directors have obtained letters of support from shareholders who have
provided loans to the Group totalling £530,000 at 31 March 2012, stating that
they will not call for repayment of the loans within the 12 months from the
date of approval of these financial statements or, if earlier, until the Group
has sufficient funds to do so.
As a result the directors consider that it is appropriate to draw up the
accounts 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.
2. OPERATING LOSS
2012 2011
£'000 £'000
This is stated after charging/(crediting):
Depreciation of owned assets 24 20
Pension contributions 5 5
Operating lease rentals paid:
- land and buildings 90 102
- other 12 19
Rentals receivable under operating leases (2) (2)
3. LOSS PER ORDINARY SHARE
2012 2011
£'000 £'000
Losses
Losses for the purposes of basic and diluted earnings 424 457
per share being net loss attributable to equity
shareholders
2012 2011
Number of shares Number Number
Weighted average number of ordinary shares for the 257,898,551 181,068,853
purposes of basic earnings per share
Number of dilutive shares under option or warrant - -
Weighted average number of ordinary shares for the 257,898,551 181,068,853
purposes of dilutive loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £424,000 (2011: £457,000) by the weighted average number of
shares during the year of 257,898,551 (2011: 181,068,853).
The diluted loss per share is identical to that used for basic loss per share
as the exercise of warrants and options would have the effect of reducing the
loss per share and therefore is not dilutive.
4. CASH AND CASH EQUIVALENTS
2012 2011
£'000 £'000
Cash held at bank 88 365
Invoice discounting facility (84) (214)
4 151
5. POSTING OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The Report and Accounts for the year ended 31 March 2012 have been posted to
shareholders together with a notice convening the Annual General Meeting for 28
September 2012 to approve the Annual Report and Accounts. The Report and
Accounts will also be available on the Company's web site: www.mediazest.com.
Notes to Editors:
About MediaZest
MediaZest is a creative media agency that specialises in providing innovative
out-of-home marketing solutions to leading retailers, brand owners and
corporations, but also works in the public sector in both the NHS and Education
markets. The Group supplies an integrated service from content creation and
system design to installation, technical support and maintenance. MediaZest was
admitted to the London Stock Exchange's AIM market in February 2005. For more
information, please visit www.mediazest.com.
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