MediaZest Plc
("MediaZest", the
"Company” or “Group"; AIM: MDZ)
Unaudited results
for the six months ended 30 September
2016
CHAIRMAN’S
STATEMENT
Introduction
The Board is pleased to report the unaudited results for the six
months ended 30 September 2016 for
MediaZest plc and its wholly owned subsidiary company MediaZest
International Ltd (“the Group”).
Financial Review
-
Revenue for the period was £1,474,000 down 8% (2015:
£1,605,000).
-
Gross profit was £631,000 up 2% (2015: £619,000).
-
Gross margins improved to 43% (2015: 39%).
-
EBITDA was a profit of £4,000 (2015: profit of £8,000).
-
The basic and fully diluted loss per share was 0.01 pence (2015: 0.01
pence).
-
Cash in hand at period end £137,000 (2015: £36,000).
Operational Review
The six months to 30 September
2016 is consistent with the comparable period, and has again
generated a positive EBITDA. Cash in hand improved to £137,000 at
the period end (2015: £36,000), full details can be seen in the
notes to these results.
Turnover has decreased by 8% against the comparable period in
the prior year, however a significant improvement has been achieved
in the gross profit margin which has increased from 39% in the
prior period to 43%. In turn, this has led to increased gross
profit to £631,000 (2015: £619,000). This increase in margin is as
a result of the Board’s ongoing strategy of focussing on providing
a full service offering to our client base. As well as equipment
sales and installation fees, new business efforts are currently
targeted towards providing ongoing managed services that include
maintenance, content management and data analytics. These services
are performed using in house engineering resources, are highly
skilled and generate better gross margins for the Company as well
as allowing us to more accurately predict future revenues and plan
growth accordingly.
This initiative is ongoing and continues to demonstrate
success.
During the six month period to 30
September 2016, revenue has continued to be generated
predominantly across the retail, corporate and education
sectors. The Retail sector (including Automotive Retail)
continues to be the area of best performance, and largest
opportunity. The thought leadership and delivery innovation the
Group has developed over recent years is standing it in good stead
to pitch on increasing levels of new business opportunity.
In addition to UK based projects, the Group has delivered a
number of overseas installations this year, and is currently
pitching for opportunities across Europe and beyond. The Board believes these
markets offer substantial growth areas for the Group and has
invested considerable effort building support partnerships with
local suppliers in key markets to facilitate such project delivery
and ongoing maintenance of the resulting solutions. For our
clients, using MediaZest’s services across multiple markets allows
them to deliver brand consistency and assure quality.
Highlights of the six month period included delivery of several
new projects with existing clients such as Hyundai, HMV, Kuoni,
Rockar, Diesel, Farrow & Ball and Ted
Baker (combined revenue in the period £600,000), but also
new business wins with Halfords, Virgin Media and LG (combined
revenue in the period £172,000). Further afield, in May 2016 the Company successfully installed a
high resolution video wall for Ugg, part of the Deckers group, in
their new flagship store in Florida.
During the period the Company completed the bulk of its work on
the latest Rockar showroom, this store was the first Rockar have
completed with Jaguar Land Rover. Work included a unique
articulated video wall that is capable of rising over 3 metres into
the air to activate the shop window and reveal the latest Jaguar
Land Rover model. This is another first for the Company and we
believe unique in the UK retail sector, demonstrating the value of
the high quality engineering services that MediaZest delivers. This
showroom has already been nominated for a major award.
Recent successful work with Rockar, Hyundai and Jaguar Land
Rover, has led to several enquiries and potential opportunities in
the automotive sector that the new business team are currently
working on.
On 12 August 2016, the Board
informed shareholders of two potential transformational projects
the Company is working on. Both projects are inter-related and the
Company expects to perform a pilot test on each in the first
quarter of calendar year 2017. If the pilot tests are successful,
the Board’s expectation is that these projects would move forward
and help generate material growth in revenues in the next financial
year, 2017-18.
Overall strategy continues to be to focus the 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, across multiple sites, and to
pursue greater recurring revenues by providing a fully managed
delivery and ongoing support service to those clients.
The strategic objective continues to be that of generating
client loyalty through excellence of delivery, coupled with
offering a diverse product range including the Group's own
products. As noted above, recurring revenues are at the forefront
of this strategy and are being increased by offering contracts for
service and maintenance, content production and management,
additional consultancy and data analysis work.
The Board continues to assess suitable candidates for the role
of finance director and, pending an appointment, has re-configured
existing resources to meet the Company’s reporting and financial
systems of control requirements.
Fundraising
During the Period
During the period, the Board moved in advance of the EU
referendum vote to add to working capital funds with a successful
placing of 166,666,800 shares at 0.15p per share to raise £250,000
before expenses of £17,000 on 11 May
2016. The shares were admitted to trading on AIM in
June 2016.
In addition, £50,000 of the outstanding interest due on
shareholder loans was also converted to 33,333,333 shares at the
same price.
Intellectual Property
The Group continues to develop its “MediaZest Retail Analytics”
product and pitch it to interested retailers. Like much of the
Company’s product portfolio, it is a high quality solution, however
the cost of this particular technology has proved prohibitive to
some retailers. Nevertheless, it continues to be an attractive
value add solution to the Group’s client base and the Board has
supplemented the Company’s offering in this area by adding a lower
cost 3rd party solution. This provides alternative
audience measurement and data capture products which form a suite
of options the client can implement. In this way, the Company is
able to maximise value add for the client and revenues generated
for shareholders.
As noted in the full year results, to help increase take up, the
Company has moved to overcome the investment hurdle by offering
this solution to clients in a Software as a Service (“SaaS”)
model.
Operating Costs
The Board continuously reviews costs whilst balancing investment
in the sales process. In 2015, the Group reduced administrative
expenses substantially and these costs savings have been
maintained, ensuring overheads remained consistent to the prior
period at £627,000 (2015: £611,000). It is the Board’s intention to
maintain this tight control over expenses.
Outlook
The Board is pleased with the progress made in the first half of
the year, and believes this will continue during the remainder of
the year.
Improvements in recurring revenue streams continue, and coupled
with tight cost control and new business wins for the second half
of the current financial year, the Board is looking to deliver
improved results for the full year ended 31
March 2017. However, this is subject to the acquisition,
timing and delivery of certain upcoming key projects.
Lance O’Neill
Chairman
13 December
2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
Notes |
30-Sep-16 |
30-Sep-15 |
31-Mar-16 |
|
|
£'000 |
£'000 |
£'000 |
Continuing
Operations |
|
|
|
|
Revenue |
|
1,474 |
1,605 |
3,144 |
Cost of sales |
|
(843) |
(986) |
(1,813) |
|
|
|
|
|
Gross
profit |
|
631 |
619 |
1,331 |
|
|
|
|
|
Administrative
expenses |
|
(627) |
(611) |
(1,273) |
Share based payment
charge |
|
- |
- |
(139) |
|
|
|
|
|
EBITDA |
|
4 |
8 |
(81) |
|
|
|
|
|
Administrative
expenses – depreciation & amortisation |
|
(38) |
(34) |
(79) |
|
|
|
|
|
Operating
Loss |
|
(34) |
(26) |
(160) |
|
|
|
|
|
Interest |
|
(37) |
(49) |
(87) |
|
|
|
|
|
Loss before
taxation |
|
(71) |
(75) |
(247) |
|
|
|
|
|
Taxation credit |
|
4 |
15 |
(1) |
|
|
|
|
|
Loss for the period
and total comprehensive loss for the period attributable to the
owner of the parent |
|
(67) |
(60) |
(248) |
|
|
|
|
|
Loss per ordinary
0.1p share |
|
|
|
|
Basic |
2 |
(0.01p) |
(0.01p) |
(0.02p) |
Diluted |
2 |
(0.01p) |
(0.01p) |
(0.02p) |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
AS AT 30 SEPTEMBER 2016 |
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
As at
30-Sep-16 |
As at
30-Sep-15 |
As at
31-Mar-16 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Non-current assets |
|
|
|
Goodwill |
|
2,772 |
2,772 |
2,772 |
Property,
plant and equipment |
63 |
79 |
78 |
Intellectual property |
26 |
49 |
39 |
Total non-current
assets |
|
2,861 |
2,900 |
2,889 |
|
|
|
|
|
Current
assets |
|
|
|
Inventories |
99 |
85 |
68 |
Trade and
other receivables |
491 |
603 |
353 |
Cash and
cash equivalents |
137 |
36 |
9 |
Total
current assets |
727 |
724 |
430 |
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
Trade and
other payables |
(1,086) |
(1,233) |
(944) |
Financial
liabilities |
(385) |
(452) |
(452) |
Total current
liabilities |
|
(1,471) |
(1,685) |
(1,396) |
|
|
|
|
|
|
|
|
|
|
Net
current liabilities |
(744) |
(961) |
(966) |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Financial
liabilities |
|
(35) |
(24) |
(57) |
Total non-current
liabilities |
|
(35) |
(24) |
(57) |
|
|
|
|
|
Net assets |
|
2,082 |
1,915 |
1,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Share
Capital |
3,499 |
3,299 |
3,299 |
Share
premium account |
5,221 |
5,138 |
5,138 |
Other
reserves |
146 |
7 |
146 |
Retained
earnings |
(6,784) |
(6,529) |
(6,717) |
Total
equity |
2,082 |
1,915 |
1,866 |
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016 |
|
|
|
|
|
|
|
Share |
Share |
Share
Options |
Retained |
Total |
|
Capital |
Premium |
Reserves |
Earnings |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Balance at 31 March
2015 |
3,299 |
5,138 |
7 |
(6,469) |
1,975 |
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
(60) |
(60) |
|
|
|
|
|
|
Total comprehensive
loss for the period |
- |
- |
- |
(60) |
(60) |
|
|
|
|
|
|
Balance at 30
September 2015 |
3,299 |
5,138 |
7 |
(6,529) |
1,915 |
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
(188) |
(188) |
Share based payment
charge |
- |
- |
139 |
- |
139 |
|
|
|
|
|
|
Total comprehensive
loss for the period |
- |
- |
139 |
(188) |
(49) |
|
|
|
|
|
|
Balance at 31 March
2016 |
3,299 |
5,138 |
146 |
(6,717) |
1,866 |
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
(67) |
(67) |
|
|
|
|
|
|
Total comprehensive
loss for the period |
- |
- |
- |
(67) |
(67) |
|
|
|
|
|
|
Issue of share
capital |
200 |
100 |
- |
- |
300 |
Share issue costs |
- |
(17) |
- |
- |
(17) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
September 2016 |
3,499 |
5,221 |
146 |
(6,784) |
2,082 |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016 |
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
Note |
30-Sep-16 |
30-Sep-15 |
31-Mar-16 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Net cash used in
operating activities |
3 |
(95) |
(171) |
(103) |
|
|
|
|
|
Taxation |
|
- |
70 |
111 |
|
|
|
|
|
Cash flows used in
investing activities |
|
|
|
|
Purchase of plant and
machinery |
|
(12) |
- |
(26) |
Disposal of plant and
machinery |
|
11 |
14 |
14 |
Purchase of
intellectual property |
|
- |
(12) |
(14) |
Net
cash (used in) / generated from investing activities |
(1) |
2 |
(26) |
|
|
|
|
|
Cash flow from
financing activities |
|
|
|
|
Other loan
repayments |
|
(10) |
(8) |
50 |
Shareholder loan
receipts / (repayments) |
|
28 |
18 |
(7) |
Interest paid |
|
(48) |
(49) |
(87) |
Proceeds of share
issue |
|
250 |
- |
- |
Share issue costs |
|
(17) |
- |
- |
Net
cash generated from financing activities / (used in) |
203 |
(39) |
(44) |
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents |
|
107 |
(138) |
(62) |
|
|
|
|
|
Cash and
cash equivalents at beginning of period / year |
(223) |
(161) |
(161) |
|
|
|
|
|
Cash and cash
equivalents at end of period / year |
4 |
(116) |
(299) |
(223) |
|
|
|
|
|
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 2016.
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 challenges in the
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 financial information 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 2015 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 2016 and
30 September 2015 is not audited.
2.
Loss per share
Basic loss per share is calculated by dividing the loss
attributed to ordinary shareholders of £67,000 (2015: £60,000) by
the weighted average number of shares during the period of
1,195,801,597 (2015: 1,039,757,641). The diluted loss per share is
identical to that used for basic loss per share as the exercise of
warrants and share options would have the effect of reducing the
loss per share and therefore is not dilutive under International
Accounting Standard 33 “Earnings per Share”.
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3.
Cash used in operations |
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
|
30-Sep-16 |
30-Sep-15 |
31-Mar-16 |
|
|
£'000 |
£'000 |
£'000 |
Operating loss |
|
(34) |
(26) |
(160) |
Depreciation of
tangible assets |
|
25 |
22 |
55 |
(Profit) / Loss on
sale of tangible assets |
|
(9) |
7 |
0 |
Amortisation of
intangible assets |
|
13 |
12 |
24 |
Decrease / (increase)
in inventories |
|
(31) |
2 |
19 |
(Decrease) / increase
in payables |
|
75 |
(118) |
(303) |
(Increase) / decrease
in receivables |
|
(134) |
(70) |
123 |
Share based payment
charge |
|
- |
- |
139 |
Net cash outflow
from operating activities |
|
(95) |
(171) |
(103) |
|
|
|
|
|
4.
Cash and cash equivalents |
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
|
30-Sep-16 |
30-Sep-15 |
31-Mar-16 |
|
|
£'000 |
£'000 |
£'000 |
Cash held at bank |
|
137 |
36 |
9 |
Invoice discounting
facility |
|
(253) |
(335) |
(232) |
|
|
(116) |
(299) |
(223) |
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5.
Subsequent events |
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There were
no subsequent events since 30 September 2016. |
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6.
Distribution of the half-yearly report |
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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 Unit 9, Woking
Business Park, Albert Drive, Woking, Surrey, GU21 5JY. |
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This announcement contains inside information for the
purposes of Article 7 of the Market Abuse Regulation
(EU) No 596/2014. |
Enquiries: |
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Geoff Robertson |
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Chief Executive
Officer |
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MediaZest Plc |
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0845 207 9378 |
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Edward Hutton / David
Hignell |
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Nominated Adviser |
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Northland Capital
Partners Limited |
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0203 861 6625 |
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Claire Noyce / William
Lynne / Niall Pearson |
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Broker |
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Hybridan LLP |
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020 3764
2341 / 2343 |
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