Half-yearly Report
MediaZest Plc
Half-yearly unaudited results for the six months ended 30 June 2009
CHAIRMAN'S STATEMENT
Introduction
The results for MediaZest Plc ("MediaZest", the "Company", and collectively
with the Subsidiary Companies, the "Group") reflect the six-month period to 30
June 2009. They incorporate the results of its subsidiaries, all of which are
wholly owned.
Financial Review
Revenue for the period was £1,035,000 (2007 - £2,145,000) and the Group made a
loss for the period, after taxation, of £370,000 (2007 - £342,000) after
finance costs of £16,000 (2007 - £7,000) and having paid administrative
expenses of £849,000 (2007 - £1,072,000). The basic and fully diluted loss per
share was 2 pence (2007 - 1 penny). The Group had cash in hand of £13,000 (2007
- £67,000) at the period end.
Operational Review
Despite the improvement in business in the second half of 2008, the global
recession had a significant impact on the Group's trading activities during
2009. The Board had expected a slowdown in the new year, however, the
postponement and/or abandonment of three high value potential projects in the
first quarter of 2009 had a negative impact on revenue and necessitated further
cost cuts.
Discretionary spend upon which much of the short term MediaZest Ventures
projects rely, has been significantly reduced and this has brought pressure to
bear on margins and has had a consequential effect of reducing the overall
level of activity during the reporting period.
In respect of TouchVision, which has a greater reliance on capital expenditure
budgets, similar problems were encountered wherein many clients froze spending
in this area, which led to reduced activity in 2009. As a result competition
and pressure on margins have both increased significantly and has contributed
to a difficult start to the year.
In recognition of these circumstances and mindful of the transactional nature
of our business, the Board has implemented the following strategy. Firstly it
recognized the need to raise further funds in the near term, as announced in
the Final 2008 Accounts, which was successfully achieved in August 2009 with an
equity fundraising of £200,000. Secondly, further cost cutting measures were
implemented, the full benefit of which will be felt from the end of this
financial year.
Outlook
Looking forward, the Board is working towards raising the quality and
sustainability of earnings through service, maintenance and content management
agreements. This has been part of the Group's ongoing strategy for some time
and has been successful to the extent that we expect to be able to cover
approximately 40% of our 2010 cost base with contracted revenues, with our
ultimate objective being to cover all of our overhead costs with this type of
revenue alone.
We have been looking for an improvement in both Education sector and MediaZest
Ventures revenues during the latter part of this year and there is evidence of
this taking place. The Group continues to work with a number of well known
retail clients on an ongoing basis. The Board expects the second half of 2009
to show improvement on both the first half of the year and the corresponding
period from the year before. We will continue to manage our cash and our
balance sheet with great care, building further upon the position reported in
this statement. Given the changes that have been implemented this year we
believe that noticeable improvement in 2010 in a more conducive business
climate is attainable.
In order to further the turnaround and development of the business, building
upon the share placement during the summer the Board may seek to complete a
further modest fund raising at some stage in the future. This will give the
Group the ability to react to opportunities that we believe will be forthcoming
as market and business sentiment improves. In this environment, we believe that
MediaZest Ventures, in particular, is well placed to move ahead. Shareholders'
consent will need to be obtained to increase the Directors' authority to allot
shares for cash. A further announcement will be made in this regard in due
course.
Lance O'Neill 28 September 2009
Chairman
CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2009
Unaudited Unaudited Audited
Half Year Half Year Year
Ended
Notes 30-Jun-09 30-Jun-08 31-Dec-08
£'000 £'000 £'000
Continuing Operations
Revenue 1,035 2,145 4,424
Cost of sales (540) (1,408) (2,846)
Gross profit 495 737 1,578
Administrative expenses (849) (1,072) (2,176)
Operating Loss (354) (335) (598)
Finance costs (16) (7) (7)
Loss before taxation (370) (342) (605)
Taxation - - -
Retained loss on ordinary activities after (370) (342) (605)
taxation
Loss per ordinary 10p share
Basic 2 £0.02 £0.01 £0.03
Diluted 2 £0.02 £0.01 £0.03
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2009
Unaudited Unaudited Audited
Half Year Half Year Year
Ended
30-Jun-09 30-Jun-08 31-Dec-08
£'000 £'000 £'000
Non-current assets
Goodwill 2,772 2,772 2,772
Plant and equipment 70 84 87
Total non-current assets 2,842 2,856 2,859
Current assets
Inventories 177 310 107
Trade and other receivables 323 1,038 617
Cash and cash equivalents 13 67 102
Total current assets 513 1,415 826
Current liabilities
Financial liabilities - borrowings (184) (290) (220)
Bank overdraft (44) - -
Trade and other payables (825) (1,028) (835)
Current tax liabilities (152) (170) (110)
Total current liabilities (1,205) (1,488) (1,165)
Net current assets / (liabilities) (692) (73) (339)
Net assets 2,150 2,783 2,520
Equity
Share Capital 2,283 2,283 2,283
Share premium account 3,211 3,211 3,211
Other reserves 7 7 7
Retained earnings (3,351) (2,718) (2,981)
Total equity 2,150 2,783 2,520
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Six months ended 30 June 2009
Share Share Share Retained Total
Options
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2008 2,283 3,211 7 (2,376) 3,125
Total comprehensive income for - - - (342) (342)
the period
Balance at 30 June 2008 2,283 3,211 7 (2,718) 2,783
Balance at 1 January 2008 2,283 3,211 7 (2,376) 3,125
Total comprehensive income for - - - (605) (605)
the period
Balance at 31st December 2008 2,283 3,211 7 (2,981) 2,520
Total comprehensive income for - - - (370) (370)
the period
Balance at 30 June 2009 2,283 3,211 7 (3,351) 2,150
CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2009
Unaudited Unaudited Audited
Half Year Half Year Year
Ended
Note 30-Jun-09 30-Jun-08 31-Dec-08
£'000 £'000 £'000
Net cash used in operating activities 3 (81) (248) (118)
Investing activities
Purchase of property, plant and equipment - (2) (27)
Proceeds from disposal of property, plant - - -
and equipment
Net cash generated from / (used in) - (2) (27)
investing activities
Financing activities
Debt financing - invoice discounting net (36) 290 220
drawdown / (repayment)
Interest paid (16) (7) (7)
Net cash generated from / (used in) (52) 283 213
financing activities
Net increase / (decrease) in cash and cash (133) 33 68
equivalents
Cash and cash equivalents at beginning of 102 34 34
period
Cash and cash equivalents at end of period (31) 67 102
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 Acts 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 International Accounting
Standards Board (IASB) and the International Financial Reporting
Interpretations Committee (IFRIC) and there is an ongoing process of review and
endorsement by the European Commission. The financial information has been
prepared on the basis of IFRS that the Directors expect to be applicable as at
31 December 2009.
The financial information has been prepared under the historical cost
convention as modified by the revaluation of available-for-sale investments.
The principal accounting policies set out below have been consistently applied
to all periods presented.
This interim report does not comply with IAS 34 "Interim Financial Reporting"
(as adopted by the European Union), as permissible under the AIM Rules for
Companies.
Non-statutory accounts
The financial information for the 6 months ended 30 June 2009 and 30 June 2008,
and the year ended 31 December 2008 do not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. Statutory accounts for
the year ended 31 December 2008, were prepared under IFRS, and have been
delivered to the Registrar of Companies. The auditors reported on those
accounts; their report was unqualified but did contain references to going
concern to which the auditors drew attention by way of an emphasis of matter
paragraph without qualifying their report and did not contain any statement
under section 498 of the Companies Act 2006.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £370,000 (2007 £342,000) by the weighted average number of
shares during the period of 22,825,327 (2007 - 22,825,327). The diluted loss
per share is identical to that used for basic loss per share as the exercise of
warrants would have the effect of reducing the loss per share and therefore is
not dilutive under International Accounting Standard 33 "Earnings per Share".
3. CASH GENERATED FROM / (USED IN) OPERATIONS
Unaudited Unaudited Audited
Half Year Half Year Year Ended
30-Jun-09 30-Jun-08 31-Dec-08
£'000 £'000 £'000
Operating loss (354) (335) (598)
Share option charge - - -
Depreciation of tangible assets 17 25 47
Decrease/(increase) in stock (70) (138) 65
Increase/(decrease) in creditors 32 186 (67)
Decrease/(increase) in debtors 294 14 435
Cash generated from / (used in) operations (81) (248) (118)
Tax paid - - -
(81) (248) (118)
4. Distribution of the Half-yearly Report
Copies of the Half-yearly Report will be available to the public from the
Company website, www.mediazest.com, and from the Company Secretary at the
Company's registered address at 3rd Floor, 16 Dover Street, London W1S 4LR.
Contact:
Geoff Robertson, MediaZest
Tel: 020 7724 5680
Aaron Smyth, Nominated Adviser
Dowgate Capital Advisers Limited
Tel: 020 7448 4400
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