Half-yearly Report
MediaZest plc
Unaudited results for the six months ended 30 September 2014
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report unaudited results for the six months ended 30 September
2014 for MediaZest plc ("MediaZest", the "Company" and, together with its
wholly owned subsidiary company MediaZest International Ltd (formerly Touch
Vision Limited) (the "Group").
Financial Review
Revenue for the period was £1,579,000 (2013: £1,572,000) and the Group made a
loss for the period after taxation of £203,000 (2013: £183,000), interest of £
26,000 (2013: £77,000), administrative expenses before depreciation of £708,000
(2013: £674,000), depreciation of £27,000 (2013: £18,000) and amortization of £
2,000 (2013: £nil).
Gross profit was £528,000 (2013: £576,000). The basic and fully diluted loss
per share was 0.022 pence (2013: 0.033 pence). EBITDA was a loss of £180,000
(2013: £98,000).
Operational Review
The Group has made ongoing progress in the last 12 months. Some notable
achievements during the 6 month period to 30 September 2014 were the successful
completion of the FIFA World Cup Trophy Tour project with Coca-Cola ("FWCTT")
which ended April 2014 (the financial benefits of which predominantly fell into
the preceding period); the much acclaimed Hyundai Rockar Bluewater Digital
Showroom which began in the period and launched in November 2014 with revenues
split accordingly; Kuoni's North East flagship Newcastle outlet; audio visual
and projection work for a range of Harry Ramsden's seaside restaurant locations
as well as hologram creation for UK Trade & Industry (UKTI) at an international
exhibition in Germany. Notwithstanding, the Group continues to develop and
provide services to a diverse and high profile client base both domestically
and overseas. The momentum generated by the FWCTT project and others has helped
the Group to attract these new projects within the period and as a result match
the comparable period's improved top line revenue figure.
At the end of 2013, the Board identified and implemented a complementary
strategy: to focus sales effort on a concentrated number of high profile
clients, providing innovative audio visual solutions which have the potential
to generate ongoing long term business opportunities, and to pursue greater
recurring revenues by developing its own products.
The strategic objective is to generate client loyalty through excellence of
delivery coupled with offering a diverse product range including the Group's
own products. In particular the Board believes that such an approach will
benefit the business by helping it to increase recurring revenues through
service and maintenance, content production and management, and additional
consultancy and data analysis work.
Intellectual Property
In December 2013, the Board identified three areas where it believed the Group
could embark upon product development which would allow the Company to achieve
improved revenue, whilst contemporaneously creating intellectual property
assets that would enhance the Group's valuation.
The decision was made to prioritise audience measurement software, and the
Group developed and tested its own product in this area during the year,
"MediaZest Retail Analytics", before releasing it to the market in November
2014. A first system has already been sold and the Company is in negotiations
to test its potential with a number of existing and new clients.
Costs associated with the development of this product are capitalised in the
intellectual property section of the Consolidated Statement of Financial
Position.
Operating costs
The Board continues to maintain tight control of costs whilst increasing
investment in the sales process. Administrative costs for the period to 30
September 2014 were £708,000 (2013: £674,000) and this increase was partly as a
result of increased costs of the London showroom in these 6 months of £35,000
and one off sales consulting costs of £13,000. The London showroom was opened
in July 2013 and hence lower costs for this asset were incurred in the
comparable period.
Outlook
The Company has already seen initial success with this strategy; particularly
in the period since July 2014. It has already led to several large scale
opportunities that the Group is currently pursuing, and has also enabled the
Group to gain and deliver successfully four high profile projects in recent
months, with revenue for these projects largely falling in the 6 month period
to 30 September 2014.
New business wins in the second half of the calendar year, coupled with
successful deployment has resulted in the Group entering 2015 with several
clients already in discussions regarding additional projects which is
encouraging.
The Board believes that the development of the MediaZest Retail Analytics
product holds much promise for the Group and the Board believes it has the
potential to generate significant and quality revenue for the Group going
forward.
Fundraising
On 17 December 2014, the Company announced a conditional placing of 125,142,900
shares at 0.35p per share to raise £438,000 before expenses. The Company
announced yesterday that it had posted a circular to Shareholders containing
the notice of the General Meeting to be held at 11.00 a.m. on 8 January 2015
which is being convened for the purpose of proposing the resolutions which are
necessary to implement the proposed placing. The circular sets out the
background to and reasons for the placing.
Lance O'Neill 23 December 2014
Chairman
MediaZest plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2014
Unaudited Unaudited Audited
Six months Six months 12 months
Notes 30-Sep-14 30-Sep-13 31-Mar-14
£'000 £'000 £'000
Continuing Operations
Revenue 1,579 1,572 2,944
Cost of sales (1,051) (996) (1,978)
Gross profit 528 576 966
Administrative expenses (708) (674) (1,474)
EBITDA (180) (98) (508)
Administrative expenses - depreciation & (29) (18) (39)
amortisation
Operating Loss (209) (116) (547)
Interest (26) (77) (128)
Loss before taxation (235) (193) (675)
Taxation credit 32 10 22
Loss for the period and total (203) (183) (653)
comprehensive loss for the period
attributable to the owner of the parent
Loss per ordinary 0.1p share
Basic 2 (0.022p) (0.033p) (0.09p)
Diluted 2 (0.022p) (0.033p) (0.09p)
MediaZest plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2014
Unaudited Unaudited Audited
As at As at As at 31-Mar-
30-Sep-14 30-Sep-13
14
£'000 £'000 £'000
Non-current assets
Goodwill 2,772 2,772 2,772
Property, plant and equipment 113 51 60
Intellectual property 46 51 60
Total non-current assets 2,931 2,823 2,832
Current assets
Inventories 310 142 95
Trade and other receivables 408 440 766
Cash and cash equivalents 31 - 268
Total current assets 749 582 1,129
Current liabilities
Trade and other payables (1,446) (1,244) (1,522)
Financial liabilities (198) (393) (200)
Total current liabilities (1,644) (1,637) (1,722)
Net current liabilities (897) (1,055) (593)
Net assets 2,036 1,768 2,239
Equity
Share Capital 3,174 2,879 3,174
Share premium account 4,871 4,225 4,871
Other reserves 7 7 7
Retained earnings (6,016) (5,343) (5,813)
Total equity 2,036 1,768 2,239
MediaZest plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2014
Share Share Share Retained Total
Options
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
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
Loss for the period - - - (470) (470)
Total comprehensive income for - - - (470) (470)
the period
Issue of share capital 295 736 - - 1,031
Share issue costs - (90) - - (90)
Balance at 31 March 2014 3,174 4,871 7 (5,813) 2,239
Loss for the period - - - (203) (203)
Total comprehensive income for - - - (203) (203)
the period
Balance at 30 September 2014 3,174 4,871 7 (6,016) 2,036
MediaZest plc
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
Unaudited Unaudited Audited
Six Six 12 months
months months
Note 30-Sep-14 30-Sep-13 31-Mar-14
£'000 £'000 £'000
Net cash (used in) / generated from 3 (34) 12 (418)
operating activities
Taxation 22 - 22
Investing activities cash flow
Purchase of plant and machinery (82) (6) (36)
Disposal of plant and machinery 2 - 3
Purchase of intellectual property (48) - -
Purchase of leasehold improvements - - (3)
Net cash (used in) investing activities (128) (6) (36)
Financing activities cash flow
Repayment of borrowings - (8) (8)
Other short term financing 58 - -
Other loan repayments - (77) (77)
Shareholder loan repayments (2) (200) (330)
Interest paid (26) (77) (128)
Interest repaid with equity - - (169)
Loans repaid with equity - - (11)
Proceeds of issue of shares - 308 1,389
Share issue costs - (19) (109)
Net cash (used in) / generated from 30 (73) 557
financing activities
Net (decrease) / increase in cash and cash (110) (67) 125
equivalents
Cash and cash equivalents at beginning of (74) (199) (199)
period / year
Cash and cash equivalents at end of period 4 (184) (266) (74)
/ 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 2015.
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 2014 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 2014 and
30 September 2013 is not audited.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £203,000 (2013: £183,000) by the weighted average number of
shares during the period of 914,614,741 (2013: 548,759,406). 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-14 30-Sep-13 31-Mar-14
£'000 £'000 £'000
Operating loss (209) (116) (547)
Depreciation of tangible assets 27 18 39
Amortisation of intangible assets 2 - -
Decrease / (increase) in inventories (215) (19) 28
Increase / (decrease) in payables 3 44 313
Decrease / (increase) in receivables 358 85 (251)
Net cash inflow/(outflow) from (34) 12 (418)
operating activities
4. Cash and cash equivalents
Unaudited Unaudited Audited
Six months Six months 12 months
30-Sep-14 30-Sep-13 31-Mar-14
£'000 £'000 £'000
Cash held at bank 31 - 268
Bank overdraft - (63) -
Invoice discounting facility (215) (203) (342)
(184) (266) (74)
5. Subsequent events
On 17 December, the Company announced a conditional placing of 125,142,900
shares at 0.35p per share to raise £438,000 before expenses. The shares are
expected to be admitted to AIM on 9 January 2015 subject to the passing of the
necessary resolutions at a General Meeting to be held on 8 January 2015.
6. Availability of the Half-early 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: 020 7382 1100
Gavin Burnell/Edward Hutton
Broker
Hybridan LLP
020 3713 4581/4582/4583
Claire Noyce/William Lynne/Niall Pearson
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