Final Results
8 September 2011
MediaZest Plc
Final Results for year ended 31 March 2011
MediaZest Plc ("MediaZest" or "the Company" or "the Group"; AIM: MDZ), the
creative digital out-of-home advertising company and audio-visual integrator,
announces its final results for the year ended 31 March 2011.
Highlights
* Revenue for the year of £1,918,000 (2010: £2,572,000)
* Reduced losses after tax of £457,000 (2010: £747,000)
* Improvement in gross margins as business mix moves towards higher margin
installation, maintenance and consulting services
* Successful fund raise of £440,000 (before expenses) in March 2011 from both
existing and new shareholders
* Cash balance at 31 March of £365,000
* Appointment of James Abdool as Group Sales Director
* Markedly increased year-on-year revenues for Q1 2012
The Company has posted the Annual Report and Financial Statements for the year
ended 31 March 2011 to shareholders.
A copy of the Annual Report and Financial Statements is also available from the
Company's registered office and from the Company's web site, www.mediazest.com
Enquiries:
Geoff Robertson, 020 7724 5680
Chief Executive Officer
MediaZest Plc
Luke Cairns/Rod Venables 020 7796 8800
Nominated Adviser
Northland Capital Partners Limited
Claire Noyce, Broker 020 7947 4350
Hybridan LLP
CHAIRMAN'S STATEMENT
Introduction
The results for MediaZest plc (the "Group") for the year ended 31 March 2011
incorporate the results of its subsidiaries, all of which are wholly owned.
Results for the Year and Key Performance Indicators
Turnover for the year was £1,918,000 (2010: £2,572,000), cost of sales was £
957,000 (2010: £1,451,000) and the Group made a loss for the year, after
taxation, of £457,000 (2010: £747,000) after finance costs of £83,000 (2010: £
32,000) and having paid administrative expenses of £1,335,000 (2010: £
1,836,000).
The basic loss and diluted loss per share was 0 pence (2010: 1 pence). The
Group had cash in hand of £365,000 (2010: £37,000) at the year end, and an
invoice discounting facility over the debtors of Touch Vision of which £214,000
(2010: £60,000) was in use at 31 March 2011.
As at 31 March 2011 the Group also had loans from shareholders of £505,000
(2010: £290,000).
As at 31 March 2011, the Group has a current maximum limit of £350,000 under
the existing invoice discounting facility. The overdraft facility was converted
into a loan of £50,000 repayable over three years with the same bank on 27
August 2010.
Business overview
The Group operates, currently, two trading businesses, Touch Vision (TV) and
MediaZest Ventures (MV). TV trades as an Audio Visual supply and installation
company whilst MV operates as a `digital out of home' creative agency.
The Group's previous accounting period was fifteen months in duration (15
months to 31 March 2010) and the Group finished the year, a 12 month accounting
period ending 31 March 2011, with monthly average sales figures broadly
consistent with the prior period. The Group's full year loss for the current
year was £457,000 (2010 - loss of £747,000).
Group turnover was £1,918,000 (2010 - £2,572,000) with turnover in the latter
half of the year being less than anticipated due, in part, to disappointing
trading over the Christmas and Easter periods. However, there was an
improvement in gross profit margins as a higher proportion of installation,
maintenance and consulting services rather than equipment sales constituted the
larger part of the year's turnover in comparison to the previous period.
In the current year, the Board is targeting a return to improved turnover
levels whilst maintaining the lower cost base that has been achieved in the
last twelve months. The Board's strategy is to attain this level of turnover by
increasing the higher margin business achievable through MV whilst both
maintaining and expanding revenue through the Education Framework agreements
that TV became a participant to in November 2010.
This strategy is already showing evidence of success as turnover in Q1 for the
period ending 31 March 2012 is anticipated to be in excess of £800,000 (a 63%
increase on the comparative period), although it is evident that margins are
under more pressure this year.
The Group raised £440,000 before expenses in March 2011 from both existing and
new shareholders, the proceeds of which were to be applied towards
strengthening the sales team and to improve the working capital resources
available to the Group's operating subsidiaries.
James Abdool joined the Group as a consultant in October 2010 and became Group
Sales Director in August 2011. James is an experienced Sales Director with a
strong history of achievement in both generating revenue and introducing new
business lines. In addition, two further salesmen joined the Sales team during
the year.
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 Microsoft, British Gas, Killik and Co, and continued to work with
long term clients such as Barclays Bank, JD Sports and Footlocker.
One of the most notable developments during the year was the launch of the
MediaZest version of 3M's "virtual mannequin" concept which drew widespread
acclaim. Since its launch at Luton Airport in February 2011 MV has provided
units to various clients, including Birmingham Airport, with several other
potential orders in the pipeline. In addition, the product has been very
popular in our other markets including retail and education. Plans are in
progress to launch an interactive version as well as a point-of-sale version.
The Company also continues to be well regarded in the market place for its
digital poster projections which have been well received and as such this is a
product that the Board believes will continue to bring ongoing revenues .
In order to improve operational efficiencies and reduce administrative costs,
the MediaZest Ventures trading division has been transferred into the Touch
Vision legal entity. The brand name will be continued, trading as a division of
Touch Vision Ltd and the original limited company made dormant.
Touch Vision Ltd
The most significant business win during the year for Touch Vision was its
success in tendering for a number of specific Lots under the Inter-Regional AV
Equipment Framework Agreement ("Framework Agreement").
The Framework Agreement will run for a term of three years, 2 November 2010 to
1 November 2013, with provision for an extension of a further year. The
Framework Agreement covers four purchasing consortia:
* Higher Education Purchasing Consortium, Wales ("HEPCW") - comprising 12
members
* Value Wales - comprises 122 member institutions and includes public sector
bodies such as Companies House, the DVLA and the Food Standards Agency, as well
as a number of Educational institutions
* London Universities Purchasing Consortium ("LUPC") - comprising 68 full
member institutions
* Southern Universities Purchasing Consortium ("SUPC") - comprising 112
member institutions
The Lots which Touch Vision has successfully tendered for are as follows:
AV equipment supply only - for HEPCW, Value Wales, LUPC, SUPC. This Lot has an
estimated annual value of £2million and Touch Vision is one of five companies
to have been successful in tendering for this Lot.
AV presentation systems, equipment and services (including design, supply and
installation) - for HEPCW, Value Wales and LUPC. The HEPCW and Value Wales
element has an estimated annual value of £1million and Touch Vision is one of
eleven companies to have been successful in tendering for this Lot. The LUPC
element of this Lot has an estimated annual value of an additional £2.5million
and Touch Vision is one of nine companies to have been successful in tendering
for this section of the Lot.
Supply of projector lamps - for all four purchasing consortia. This Lot has an
estimated annual value of £2million. Touch Vision is one of four companies to
have been successful in tendering for this Lot.
The expected total annual spend by the consortia in respect of the Lots to
which Touch Vision has been appointed is £7.5million.
Although Touch Vision must win business under competitive terms of tender it
does give the company access to a large number of new potential clients.
Despite only being awarded the opportunity to participate the Framework
Agreement in November 2010, the company has already won several significant
pieces of business and developed new client relationships. In light of the
ongoing changes in funding within the Education sector, it appears that
spending for the 2011 calendar year will be subdued across these consortia but
the Board believes there will be strong ongoing opportunities generated from
this and subsequent framework agreements and that this will provide additional
revenue opportunities in the coming years.
Outside of these agreements, the Education division continues to add clients
including the Licensed Victuallers School in Ascot and Burton College in the
Midlands, and performs ongoing work with long term clients such as London South
Bank University.
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.
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
As noted above, the Company has increased its resource in its sales and
marketing function and this investment is leading to new business
opportunities.
Work in progress during the year to date includes several significant projects.
Firstly, Touch Vision has completed an installation programme for a large UK
University in excess of £300,000 which was outside of the Framework Agreement
noted above. Second, the Framework Agreement has also provided some ongoing
equipment only purchases which, despite being of a lower margin than our
installation work, have enabled TV to buy more effectively and begin developing
relationships with new clients.
In the corporate market, MV's hologram solutions have been used by blue chip
companies including Astra Zeneca and British Telecom. We have also undertaken a
branch refurbishment programme with the West Bromwich Building Society which is
currently ongoing.
Looking forward, the Group's businesses operate in markets that are affected by
both the level of retail customer demand and government/local authority
expenditure. Whilst customer demand and interest is good, presently, the Board
recognises that a re-emergence of an economic slowdown may have an effect on
future trading performance.
However, the Board believes that the Group is now more versatile and nimble
enough to deal with changes in the business environment on a more timely basis
and as a consequence give itself a greater ability to cope with events beyond
its control, than in previous years. Notwithstanding, the Board is committed to
moving the Group forward to profitability and believes that the strategy that
it has implemented is achievable.
Lance O'Neill
Chairman
MediaZest plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2011
Year ended 15 months
ended
31 March 2011 31 March 2010
£'000 £'000
Continuing operations
Revenue 1,918 2,572
Cost of sales (957) (1,451)
Gross profit 961 1,121
Administrative expenses (1,335) (1,836)
Operating loss (374) (715)
Finance costs (83) (32)
Loss on ordinary activities (457) (747)
before taxation
Tax on loss on ordinary - -
activities
Loss and total comprehensive loss on (457) (747)
ordinary activities after taxation
Loss per ordinary 0.1p share
Basic (0.002p) (0.010p)
Diluted (0.002p) (0.010p)
MediaZest plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2011
31 March 2011 31 March 2010
£'000 £'000
Non-current assets
Goodwill 2,772 2,772
Property, plant and 32 48
equipment
Total non-current assets 2,804 2,820
Current assets
Inventories 120 94
Trade and other 523 255
receivables
Cash and cash equivalents 365 37
Total current assets 1,008 386
Current liabilities
Trade and other payables (1,008) (629)
Financial liabilities (521) (290)
Total current liabilities (1,529) (919)
Net current liabilities (521) (533)
Non-current liabilities
Financial liabilities (25) -
Total non-current (25) -
liabilities
Net assets 2,258 2,287
Equity
Share capital 2,507 2,428
Share premium account 3,929 3,580
Share options reserve 7 7
Retained earnings (4,185) (3,728)
Total equity 2,258 2,287
MediaZest plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2011
Share Share Share Retained Total
Options
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2009 2,283 3,211 7 (2,981) 2,520
Loss for the period - - - (747) (747)
Total comprehensive income - - - (747) (747)
for the year
Issue of share capital 145 379 - - 524
Share issue costs - (10) - - (10)
Balance at 31 March 2010 2,428 3,580 7 (3,728) 2,287
Loss for the year - - - (457) (457)
Total comprehensive income - - - (457) (457)
for the year
Issue of share capital 79 361 - - 440
Issue costs - (12) - - (12)
Balance at 31 March 2011 2,507 3,929 7 (4,185) 2,258
MediaZest plc
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2011
2011 2010
£'000 £'000
Net cash used in operating activities (423) (667)
Cash flows used in investing activities
Purchase of property, plant and equipment (4) (10)
Net cash used in investing activities (4) (10)
Cash flow (used in)/from financing
activities
Bank loan 50 -
Repayment of borrowings (9) -
Shareholder loans 325 290
Shareholder repayments (110) -
Interest paid (83) (32)
Cash proceeds from invoice discounter - 90
Proceeds of share issue 440 434
Share issue costs (12) (10)
Net cash generated from financing 601 772
activities
Net increase in cash and cash equivalents 174 95
Cash and cash equivalents at beginning of (23) (118)
year
Cash and cash equivalents at end of the 151 (23)
year
NOTES
1. Basis of Preparation
The financial information set out above does not constitute the Company's
statutory accounts for the 15 month period ended 31 March 2010 or the year
ended 31 March 2011 within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the 15 month period ended 31 March 2010 have been
delivered to the Registrar of Companies and those for the year ended 31 March
2011 will be delivered in due course.
The auditors have reported on the accounts for the 15 month period ended 31
March 2010; 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 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 Company's statutory accounts for the year ended 31 March 2011 have been
prepared in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU") and in accordance with the
Group's accounting policies as set out in the 2010 statutory accounts.
The financial statements contained in the statutory accounts have been prepared
under the historic cost convention unless otherwise stated.
2. 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 £480,000 at 31 March 2011, stating that
they will not call for repayment of the loans within the next 12 months 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.
3. Loss per Ordinary Share
2011 2010
£'000 £'000
Losses
Losses for the purposes of basic and diluted 457 747
earnings per share being net loss attributable to
equity shareholders
Number of shares
Weighted average number of ordinary shares for the 181,068,853 69,917,362
purposes of basic earnings per share
Number of dilutive shares under option or warrant - -
Weighted average number of ordinary shares for the 181,068,853 69,917,362
purposes of dilutive loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £457,000 (2010: £747,000) by the weighted average number of
shares during the year of 181,068,853 (2010: 69,917,362). 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. Posting of the Annual Report and Financial Statements
The Report and Accounts for the year ended 31 March 2011 have been posted to
shareholders together with a notice convening the Annual General Meeting for 30
September 2010 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 brand owners and media agencies. The
group supplies an integrated service from content creation and system design to
installation, technical support and maintenance. MediaZest has its headquarters
in London, whilst Touch Vision, its design and engineering division, is based
in Farnham in Surrey. Its customer base includes Astra Zeneca, Chivas, HMV,
Fiat, Microsoft, Nike, O2, Shell and Vodafone. MediaZest was admitted to
London's AIM market in February 2005. For more information, please visit
www.mediazest.com
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