Half-yearly Report
MediaZest Plc
Unaudited results for the six months ended 30 September 2013
CHAIRMAN'S STATEMENT
Introduction
Results for the six months ended 30 September 2013 for MediaZest Plc
("MediaZest", the "Company" and, together with its wholly owned subsidiary
company Touch Vision Ltd, the "Group").
Fundraising
On 13 December, the Company announced a conditional placing of 247,142,800
shares at 0.35p per share to raise £865,000 before expenses, and a proposed
issue of 47,479,714 new shares through the conversion of loan interest
amounting to £166,179 at a price of 0.35p per share. The shares are expected to
be admitted to AIM on 2 January 2014 subject to the passing of the necessary
resolutions at a General Meeting to be held on 31 December 2013.
Previous to this, on 8 July 2013 the Company completed a placing of 143,200,000
shares at 0.25p per share. The gross proceeds included conversion of £50,000 of
loan interest at the placing price. Net cash proceeds were £289,000 (of which £
200,000 was used to pay down debt).
Financial Review
Revenue for the period was £1,572,000 (2012: £964,000) and the Group made a
loss for the period after taxation of £183,000 (2012: £239,000), interest of £
77,000 (2012: £55,000), administrative expenses before depreciation of £674,000
(2012: £625,000) and depreciation of £18,000 (2012: £20,000).
Gross profit was £576,000 (2012: £461,000). The basic and fully diluted loss
per share was 0.033 pence (2012: 0.073 pence). EBITDA was a loss of £98,000
(2012: £164,000).
Operational Review
The results for the period reflect a significant improvement in revenue
compared to the corresponding period last year. This follows a large contract
win announced at the beginning of the period with a multinational client, a
constituent of the Consumer Staple sector of the S&P 500 index. Total revenue
from the project, which is contracted through one of the world's biggest
advertising groups, is expected to be approximately £1.1million in the period
to summer 2014. Contract delivery has begun with great success, and the Group
has already been paid £850,000 of this revenue, the majority of which falls
within the period ended 30 September 2013. The Group is currently pitching for
additional work relating to this project.
Top line revenue for the period increased to £1,572,000 (2012: £964,000)
representing growth of 63%. This growth was achieved through the large contract
win detailed above, in addition to further work with existing customers such as
Samsung, O2, Kuoni and JD Sports and new projects from growth areas such as the
corporate market.
Gross profit margin as a percentage of revenue was 37% (2012: 48%) mainly
reflecting a number of low margin equipment supply only contracts with clients
in the education sector. In addition, the reduced level of service and
maintenance work provided for HMV following its administration in January 2013
had an impact. Prospects for ongoing project work in the retail, event/brand
experience and corporate markets that the Group is targeting for future growth
continue to be strong.
As previously noted, the Board has pursued a policy this year of increasing its
investment in the sales team and, in particular, the development of new
business in the corporate sector. The Board was particularly pleased,
therefore, to announce its first major win in this sector for several years, a
project delivered in the period for a City of London based private equity
company. Development in this sector has continued and, on 7 November 2013, the
Group was able to announce a second major engagement in respect of a large
videowall project, again in the City of London, due for completion late
December 2013.
The Board was also pleased to announce the opening of its new London showroom,
which is expected to assist in driving revenues by giving the Group a means to
demonstrate its unique technology offering.
Whilst the impact of increased revenues has led to improved gross profit,
investing in improving sales and marketing resource in order to generate
increased future returns has naturally had an impact on the EBITDA and tempered
the improvement in results. However, financial performance for the first half
of the financial year remains much improved on corresponding periods in recent
years.
MediaZest Plc
Operational Review (continued)
Although interest and finance costs remained high in the half year, improvement
in the Company's balance sheet and reduced levels of debt made possible by a
conditional fundraising, as announced on 13 December 2013 and as detailed
above, will enable the Group to significantly reduce these costs going forward.
Outlook
The Group has made good progress in the last 12 months, and this has enabled it
to undertake a conditional placing to institutional and other investors to
raise £865,000 (before expenses). This placing will allow MediaZest to
capitalise upon the opportunities before it, both in driving additional
business and developing new products for which the Board believes there is a
substantial market.
The Company will also de-gear its balance sheet as a consequence of this
proposed placing. Furthermore, the Group will have improved its working capital
position and its ability to develop additional products and enable it to
continue to invest in the sales and marketing process. The calendar year is
ending on a high note and the Group can look forward to further progress in
2014.
Lance O'Neill 20 December 2013
Chairman
MediaZest Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2013
Unaudited Unaudited Audited
Six months Six months 12 months
Notes 30-Sep-13 30-Sep-12 31-Mar-13
£'000 £'000 £'000
Continuing Operations
Revenue 1,572 964 1,850
Cost of sales (996) (503) (941)
Gross profit 576 461 909
Administrative expenses (674) (625) (1,275)
EBITDA (98) (164) (366)
Administrative expenses - depreciation (18) (20) (47)
Operating Loss (116) (184) (413)
Interest (77) (55) (138)
Loss before taxation (193) (239) (551)
Taxation credit 10 - -
Loss for the period and total (183) (239) (551)
comprehensive loss for the period
attributable to the owner of the parent
Loss per ordinary 0.1p share
Basic 2 (0.033p) (0.073p) (0.15p)
Diluted 2 (0.033p) (0.073p) (0.15p)
MediaZest Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2013
Unaudited Unaudited Audited
As at As at As at
30-Sep-13 30-Sep-12 31-Mar-13
£'000 £'000 £'000
Non-current assets
Goodwill 2,772 2,772 2,772
Property, plant and equipment 51 83 63
Total non-current assets 2,823 2,855 2,835
Current assets
Inventories 142 95 123
Trade and other receivables 440 406 515
Cash and cash equivalents - 33 1
Total current assets 582 534 639
Current liabilities
Trade and other payables (1,244) (1,093) (1,155)
Financial liabilities (393) (546) (707)
Total current liabilities (1,637) (1,639) (1,862)
Net current liabilities (1,055) (1,105) (1,223)
Net assets 1,768 1,750 1,612
Equity
Share Capital 2,879 2,587 2,736
Share premium account 4,225 4,004 4,029
Other reserves 7 7 7
Retained earnings (5,343) (4,848) (5,160)
Total equity 1,768 1,750 1,612
MediaZest Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2013
Share
Share Share Options Retained Total
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 31 March 2012 2,587 4,004 7 (4,609) 1,989
Loss for the period - - - (239) (239)
Total comprehensive income for - - - (239) (239)
the period
Balance at 30 September 2012 2,587 4,004 7 (4,848) 1,750
Loss for the period - - - (312) (312)
Total comprehensive income for - - - (312) (312)
the period
Issue of share capital 149 30 - - 179
Share issue costs - (5) - - (5)
Balance at 31 March 2013 2,736 4,029 7 (5,160) 1,612
Loss for the period - - - (183) (183)
Total comprehensive income for - - - (183) (183)
the period
Issue of share capital 143 215 - - 358
Share issue costs - (19) - - (19)
Balance at 30 September 2013 2,879 4,225 7 (5,343) 1,768
MediaZest Plc
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013
Unaudited Unaudited Audited
Six Six
months months 12 months
Note 30-Sep-13 30-Sep-12 31-Mar-13
£'000 £'000 £'000
Net cash used in operating activities 3 12 (82) (385)
Cash flows used in investing activities
Purchase of plant and machinery (6) (6) (16)
Disposal of plant and machinery - - 3
Net cash used in investing activities (6) (6) (13)
Cash flow from financing activities
Repayment of borrowings (8) (8) (17)
Shareholder loans - - 77
Other loan repayments (77) - -
Shareholder loan repayments (200) - -
Interest paid (77) (55) (39)
Proceeds of issue of shares 308 - 179
Share issue costs (19) - (5)
Net cash generated from/(used in) (23) (63) 195
financing activities
Net decrease in cash and cash equivalents (67) (151) (203)
Cash and cash equivalents at beginning of (199) 4 4
period/year
Cash and cash equivalents at end of period 4 (266) (147) (199)
/year
MediaZest Plc
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 Act 2006 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 IFRS Interpretations Committee 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 March 2014.
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.
Going Concern
The Directors have considered financial projections based upon known future
invoicing, existing contracts, pipeline of new business and the number of
opportunities it is currently working on, particularly in the Retail sector. In
addition, these forecasts have been considered in the light of the ongoing
economic difficulties in the UK and global economy, previous experience of the
markets in which the Group 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 Group will generate sufficient cash resources
to meet its liabilities as they fall due over the next 12 month period from the
date of this interim announcement.
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.
Non-statutory accounts
The financial information contained in this document does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
("the Act").
The statutory accounts for the year ended 31 March 2013 have been filed with
the Registrar of Companies. The report of the auditors on those statutory
accounts was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under Section 498(2) or (3) of the
Act. The financial information for the six months ended 30 September 2013 and
30 September 2012 is not audited.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £183,000 (2012: £239,000) by the weighted average number of
shares during the period of 548,759,406 (2012: 327,625,327). 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".
MediaZest Plc
NOTES TO THE FINANCIAL INFORMATION (Continued)
3. CASH USED IN OPERATIONS
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-13 30-Sep-12 31-Mar-13
£'000 £'000 £'000
Operating loss (116) (184) (413)
Depreciation of tangible assets 18 20 47
(Increase)/decrease in inventories (19) 11 (17)
Increase in payables 44 207 243
Decrease/(increase) in receivables 85 (136) (245)
Net cash inflow/(outflow) from 12 (82) (385)
operating activities
4. CASH AND CASH EQUIVALENTS
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-13 30-Sep-12 31-Mar-13
£'000 £'000 £'000
Cash held at bank - 33 1
Bank overdraft (63) - (92)
Invoice discounting facility (203) (180) (108)
(266) (147) (199)
5. Subsequent Events
On 13 December, the Company announced a conditional placing of 247,142,800
shares at 0.35p per share to raise £865,000 before expenses, and a proposed
issue of 47,479,714 new shares through the conversion of loan interest
amounting to £166,179 at a price of 0.35p per share. The shares are expected to
be admitted to AIM on 2 January 2014 subject to the passing of the necessary
resolutions at a General Meeting to be held on 31 December 2013.
6. Distribution of the Half-yearly Report
Copies of the Half-yearly Report will be available to the public from the
Company's website, www.mediazest.com, and from the Company Secretary at the
Company's registered address at 27/28 Eastcastle Street, London, W1W 8DH.
MediaZest Plc
Tel: 020 7724 5680
Geoff Robertson
Chief Executive Officer
Nominated Adviser
Northland Capital Partners Limited
Tel: 0207 796 8800
Gavin Burnell/Edward Hutton
Broker
Hybridan LLP
0207 947 4350
Claire Noyce/William Lynne
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