REG-MediaZest Plc: Final Results for the Year ended 30 September 2022
01/03/2023 14:15
FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022
MEDIAZEST PLC
1 March 2023
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
MediaZest PLC
(“MediaZest”, the “Company” or the “Group”; AIM: MDZ)
Final Results for the Year ended 30 September 2022
MediaZest, the creative audio-visual company, is pleased to provide
shareholders with final results for the year ended 30 September 2022.
Highlights:
£’000 FY22 FY21 Change
Revenue 2,820 2,246 +26%
Gross Profit 1,499 1,075 +39%
Gross Margin 53.2% 47.9% +5.3%
EBITDA 220 78 +184%
Profit after tax 12 (140) £152k
Earnings/(Loss) per ordinary 0.1p share (pence per share) 0.0009 (0.0101) 0.011
* Strong top line performance with a year-on-year revenue growth at +26%
* Gross margins up 39% to £1,499k, margin percentage strengthens to 53.2%
* EBITDA of £220k an increase of 184% year on year
* Recovering well post Covid-19 Pandemic
* Strengthening relations with long term clients, Pets at Home, Hyundai,
Lululemon & HMV
* Multiple new business wins outside of the UK, with subsidiary established in
the Netherlands post year end
Chairman's Statement
for the Year Ended 30 September 2022
Introduction
The Board presents the consolidated audited results for the year ended 30
September 2022 for MediaZest plc ("MDZ" or the 'Company') and its wholly owned
subsidiary company MediaZest International Ltd ("MDZI"), which together
constitute the "Group".
MDZ Group Results for the year and Key Performance Indicators ("KPIs")
* Revenue for the year grew 26% to £2,820,000 (2021: £2,246,000).
* Gross profit increased by 39% to £1,499,000 (2021: £1,075,000).
* Gross margins improved to 53% (2021: 48%).
* Administrative expenses excluding depreciation and amortisation were £1,279,000 (2021: £998,000). These expenses were particularly low in the prior year due to the impact of strong cost control in the wake of the Covid-19 Pandemic (the 'Pandemic').
* Depreciation and amortisation costs were £63,000 (2021: £74,000).
* EBITDA improved by 184% to a profit of £220,000 (2021: £78,000).
* Profit After Tax for the period was £12,000 (2021: loss of £140,000).
- The basic and fully diluted earnings per share was a profit per share of 0.0009 pence (2021: loss per share 0.0101 pence).
* Net assets of the group are £1,241,000 (2021: £1,229,000).
* Cash in hand at 30 September 2022 was £45,000 (2021: £120,000).
MDZ Group Summary
The Group’s financial results for the year ended 30 September 2022 showed a
strong bounce back from the effects of the Pandemic in the previous year, with
significant improvements in revenue, gross profit, gross margin, EBITDA and
profit after tax. All of these metrics show considerable positive change from
the previous 12 months and the 18 month period before that.
Continued growth in the operating subsidiary, MDZI, led to an increase in
EBITDA to £497,000 (2021: £330,000) and profit after tax of £384,000 (2021:
£206,000).
This enabled the Group to deliver a substantial positive swing in financial
results as the difficulties of the Pandemic eased, with a best-ever EBITDA of
£220,000 (2021: £78,000), and a profit after tax of £12,000 (2021: loss of
£140,000).
Client demand in all three key sectors in which the Company operates - Retail,
Automotive and Corporate Office spaces - continued to be encouraging with new
project briefs and new client pitches seen consistently throughout the year.
There has been a notable increase in incoming opportunities post the year end
as a result of additional investment in marketing activity. The Company
intends to continue its marketing push throughout 2023.
Long term clients including Pets at Home, Lululemon, Hyundai, Ted Baker and
HMV all progressed roll out programmes or ongoing works during the financial
year, which has continued into the new financial year ending 30 September
2023.
New business wins outside of the UK have also been notable, with projects
delivered in Spain, the Netherlands, France and Germany. Further overseas
projects in Slovakia and the USA have been won post the period end, with a
number of other significant new opportunities already pitched to clients and
awaiting a decision. To better deliver to EU based clients, the Group has set
up a Dutch subsidiary which will enable it to be more efficient when working
in the region. This EU presence is expected to facilitate an increased number
of client opportunities and projects accordingly.
Recurring revenue streams remain strong and a key focus of management. Several
customer contracts run in excess of twelve months and additional new contracts
are written alongside the majority of permanent installation projects as the
Group progresses and the digital signage market continues to mature.
The Group continues to operate in three core sectors:
Retail - Digital transformation continues as retailers deploy digital signage
displays including window displays, self-service kiosks and large scale
displays such as LED and videowalls.
Automotive - As this sector evolves rapidly, the role of technology in the
showroom journey increases. As a result, many of the audio-visual solutions
deployed in general Retail are being seen in these markets.
Corporate Offices - typical projects in this sector include hybrid meeting
rooms, video conferencing technology and innovation centres - all of which are
undergoing radical transformation that in many cases have been accelerated by
the additional demands that the Pandemic and subsequent widespread Hybrid
working needs have put upon office building technology.
As expected, demand in all three sectors continues to grow and enquiries are
continuing to increase as audio- visual technology plays a greater role in day
to day operations.
Group Strategy
The Board’s strategy continues to be focussed on growing revenues and client
numbers, with emphasis on those with long-term opportunities to deploy
solutions across multiple sites at scale. The quality of revenue and duration
of recurring revenue streams remain a key focus to enable the Group to
generate long term value.
The Group’s market positioning is to provide a high-quality Managed Service
offering wrapped around hardware and software delivery that generates ongoing
contractual revenues from the customer base over several years. Supply chain
issues, felt across many industries, have enabled the Group to add further
value in the consultation and specification areas of client work as businesses
look to rebound from the Pandemic.
In the longer-term, the aim is to cover the Group's costs with recurring
contractual revenues to achieve consistent profitability, supplemented by one
or more 'game changing' large scale roll-out projects.
Due to the improved performance in the financial year, further fundraising
efforts were not necessary.
The Board believes that in addition to organic growth, the current state of
the digital signage market is well suited to a 'buy-and-build' acquisition
strategy to take advantage of economies of scale and the maturing market. As
one of very few listed vehicles in this space, the Company is in an
advantageous position to take advantage of this opportunity and generate
substantial shareholder value accordingly. As such the Board has held
discussions with a number of suitable parties and continues to do so, with the
intention of consummating at least one revenue enhancing, synergistic
acquisition in 2023.
MDZ Group Operational Review
Long standing clients in the automotive sector such as Hyundai continued to
work with the Group during the year, continuing the roll out of interactive
touchscreen technology in showrooms to assist with Electric Vehicle ('EV')
sales. During the year, a refresh of the ground-breaking dealership in the
Bluewater shopping centre was completed to transform it into an EV based
showroom. Post year end, a similar installation was completed in Glasgow as
the market evolves focussing increasingly on these new technologies.
Pets at Home continued to roll out digital signage solutions to stores and the
Company has now deployed these to over 70 of their stores with more in the
pipeline.
Lululemon Athletica projects in the UK were also supplemented by new stores in
European locations such as Barcelona and Madrid. Post year end the Company was
pleased to help deliver innovative LED technology into their new Champs
Elysees flagship store in Paris.
In addition to established digital signage technologies, the Group continued
to deliver innovation for many clients including holographic displays for
Mastercard and Vodafone. Lift and learn RFID tags, movement sensors and
augmented reality solutions are a handful of other cutting-edge techniques
deployed for clients in the last 12 months.
HMV, the Group’s longest standing client, continued to open and refurbish
new stores with audio solutions across the UK, provided by MediaZest.
New areas of expertise continued to flourish including work with digital
artists which included the installation and design of an immersive art gallery
in London, to be completed in January 2023.
Current trading and outlook into Financial Year Q2 23 (January to March 2023)
At present, the number of client projects and new business opportunities
remain encouraging. Although macro- economic conditions are expected to remain
challenging in 2023, this does not yet appear to be negatively affecting
demand for the Group’s services. However, the Board continues to monitor
performance and its cost base very carefully.
In the meantime, the Group’s target is to build on the recent progress and
look to generate both organic growth and evaluate potential acquisition
targets to supplement that growth where suitable.
Ongoing long term project roll outs with customers including Hyundai, Pets at
Home, Lululemon and HMV have continued into Financial Year 2023 with further
installations planned or underway.
The Group retains its facilities with an Invoice Financing facility and
continued support from shareholders by extending shareholder loans.
The Group at 30 September 22 had net assets of £1,241,000 (2021:
£1,229,000). The Board remains positive about the Group’s future growth
potential.
Lance O'Neill Chairman
28 February 2023
Consolidated Statement of Profit or Loss
for the Year Ended 30 September 2022
2022 2021
£'000 £'000
CONTINUING OPERATIONS
Revenue 2,820 2,246
Cost of sales (1,321) (1,171)
GROSS PROFIT 1,499 1,075
Administrative expenses – excluding
depreciation & amortisation (1,279) (997)
EBITDA 220 78
Administrative expenses – depreciation
& amortisation (63) (74)
OPERATING PROFIT 157 4
Finance costs (145) (144)
PROFIT/(LOSS) BEFORE INCOME TAX 12 (140)
Income tax - -
PROFIT/(LOSS) FOR THE YEAR 12 (140)
Owners of the parent 12 (140)
Earnings per share expressed
in pence per share:
Basic 0.0009 (0.0101)
Diluted 0.0009 (0.0101)
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 30 September 2022
2022 2021
£'000 £'000
PROFIT/(LOSS) FOR THE YEAR 12 (140)
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX - -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 12 (140)
Total comprehensive income attributable to:
12 (140)
Consolidated Statement of Financial Position
30 September 2022
2022 2021
£'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill 2,772 2,772
Owned
Intangible assets - -
Property, plant and equipment 34 18
Right-of-use
Property, plant and equipment 83 127
Investments - -
2,889 2,917
CURRENT ASSETS
Inventories 121 150
Trade and other receivables 674 414
Cash and cash equivalents 45 120
840 684
TOTAL ASSETS 3,729 3,601
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 3,656 3,656
Share premium 5,244 5,244
Share option reserve 146 146
Retained earnings (7,805) (7,817)
TOTAL EQUITY 1,241 1,229
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and borrowings 83 272
CURRENT LIABILITIES
Trade and other payables 1,101 1,114
Financial liabilities - borrowings
Interest bearing loans and borrowings 1,304 986
2,405 2,100
TOTAL LIABILITIES 2,488 2,372
TOTAL EQUITY AND LIABILITIES 3,729 3,601
Consolidated Statement of Changes in Equity
for the Year Ended 30 September 2022
Called up share capital Retained earnings Share premium Share option reserve Total equity
£'000 £'000 £'000 ££'000 £’000
Balance at 1 October 2020 3,656 (7,677) 5,244 146 1,369
Changes in equity
Total comprehensive income - (140) - - (140)
Balance at 30 September 2021 3,656 (7,817) 5,244 146 1,229
Changes in equity
Total comprehensive income - 12 - - 12
Balance at 30 September 2022 3,656 (7,805) 5,244 146 1,241
Consolidated Statement of Cash Flows
for the Year Ended 30 September 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Cash generated from operations (24) 246
Net cash from operating activities (24) 246
Cash flows from investing activities
Purchase of tangible fixed assets (35) (8)
Net cash from investing activities (35) (8)
Cash flows from financing activities
Other loans repayments 1 (10)
Shareholder loan net receipt/(repayment) 15 (30)
Bounce back loan (repayment)/receipt (10) (3)
Payment of lease liabilities (46) (42)
Invoice financing (repayment)/receipt 98 (53)
Interest paid (74) (71)
Net cash from financing activities (16) (209)
(Decrease)/increase in cash and cash equivalents (75) 29
Cash and cash equivalents at beginning of year 120 91
Cash and cash equivalents at end of year 45 120
NOTES TO THE FINANCIAL STATEMENTS
The financial information set out in this announcement does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006.
The financial information for the period ended 30 September 2021 is derived
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditors reported on those accounts;
their report was (i) unqualified, and (ii) did not contain a statement
under section 498(2) or 498(3) of the Companies Act 2006.
The statutory accounts for the year ended 30 September 2022 have not yet been
delivered to the Registrar of Companies. The auditors reported on those
accounts; their report was (i) unqualified, and (ii) did not contain a
statement under section 498(2) or 498(3) of the Companies Act 2006.
The 2022 accounts will be delivered to the Registrar of Companies following
the Company's Annual General Meeting, details of which will be announced
shortly.
Going concern
The Group made a profit after tax of £12,000 (2021: loss of £140,000) and
has net current liabilities of £1,565,000 (2021: £1,416,000). The financial
statements are prepared on a going concern basis which the Directors believe
to be appropriate for the following reasons:
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 in 2023, across all main
sectors the company specialises in. Several substantial new contracts have
been won during the new financial year, ongoing roll out projects with
existing clients continue apace, and recurring revenues remain robust. Future
operating and capital costs have also been reviewed and included in the cash
flow forecast prepared by the Directors.
These forecasts indicate that the Group 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 two shareholders who have
provided material loans to the Group, stating that they will not call for
repayment of the loan within the 12 months from the date of approval of these
financial statements or, if earlier, until the Group has sufficient funds to
do so. The balance of these loans at 30 September 2022 totalled £705,000
(2021: £643,000).
As a result the Directors consider that it is appropriate to draw up the
accounts on a going concern basis. The financial statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
Whilst the financial information included in this announcement has been
computed in accordance with International Financial Reporting Standards
(IFRS), this announcement does not in itself contain sufficient information to
comply with IFRS. The accounting policies used in preparation of this
announcement are consistent with those in the full financial statements that
have yet to be published.
The Report and Consolidated Financial Statements for the year ended 30
September 2022 will be posted to shareholders shortly and will also be
available to download from the Company's website: www.mediazest.com
1. SEGMENTAL REPORTING
Revenue for the year can be analysed by customer location as follows:
2022 20021
£'000 £'000
UK and Channel Islands 2,718 2,178
Rest of Europe 102 66
North America - 2
2,820 2,246
An analysis of revenue by type is shown below:
2022 2021
£'000 £'000
Hardware and installation 2,191 1,714
Support and maintenance - recurring revenue 498 477
Other services (including software solutions) 131 55
2,820 2,246
Segmental information and results
The Chief Operating Decision Maker ('CODM'), who is responsible for the
allocation of resources and assessing performance of the operating segments,
has been identified as the Board. IFRS 8 requires operating segments to be
identified on the basis of internal reports that are regularly reviewed by the
Board. The Board have reviewed segmental information and concluded that there
is only one operating segment.
The Group does not rely on any individual client and there are seven clients
who have contributed over 5% of total revenue each. The following revenues
arose from sales to the Group's largest client:
2022 2021
£'000 £'000
Goods and services 589 228
Service and maintenance 117 131
Other services 40 -
746 359
2. EARNINGS PER SHARE
2022 2021
Profit/(Loss) £'000 £'000
Profit/(Loss) for the purposes of basic and diluted earnings per share being net loss attributable to equity shareholders 12 (140)
2022 2021
Number of shares Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share 1,396,425,774 1,396,425,774
Number of dilutive shares under option or warrant -
2022 2021
Weighted average number of ordinary shares for the purposes of dilutive loss per share 1,396,425,774 1,396,425,774
Basic earnings per share is calculated by dividing the profit after tax
attributed to ordinary shareholders of £12,000 (2021 loss: £140,000) by the
weighted average number of shares during the year of 1,396,425,774 (2021:
1,396,425,774).
The diluted loss per share is identical to that used for basic loss per share
as the options are "out of the money" and therefore anti-dilutive.
3. RECONCILIATION OF PROFIT/(LOSS) BEFORE INCOME TAX TO CASH GENERATED FROM
OPERATIONS
2022 2021
£’000 £’000
Profit/(Loss) before income tax 12 (140)
Depreciation charges 63 74
Finance charges - (90)
Finance costs 145 144
220 (12)
Decrease/(increase) in inventories 29 (57)
(Increase)/decrease in trade and other receivables (260) 79
(decrease)/increase in trade and other payables (13) 236
Cash (used in)/generated from operations (24) 246
4. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Year ended 30 September 2022
30.9.22 1.10.2021
£’000 £’000
Cash and cash equivalents 45 120
Enquiries
Company
Geoff
Robertson
0845 207 937
Chief Executive Officer
Nominated Adviser
David Hignell / Adam
Cowl
020 3470 0470
SP Angel Corporate Finance LLP
Broker
Claire
Noyce
020 3764 2341
Hybridan LLP
About MediaZest
MediaZest is a creative audio-visual systems integrator that specialises in
providing innovative marketing solutions to leading retailers, brand owners
and corporations, but also works in the public sector in both the NHS and
Education markets. The Group supplies an integrated service from content
creation and system design to installation, technical support, and
maintenance. MediaZest was admitted to the London Stock Exchange's AIM market
in February 2005. For more information, please visit www.mediazest.com
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