REG-MediaZest Plc: Half-year Report
28/06/2024 07:15
28 June 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 “Group"; AIM: MDZ)
Half-year Report
Unaudited Interim Results
for the six months ended 31 March 2024
MediaZest plc (AIM: MDZ), the creative audio-visual solutions provider,
announces its unaudited interim results for the six months ended 31 March 2024
(the “H1 FY24” or the “Period”), showing considerable improvement on
the prior comparative period, with the business growing revenue and reducing
losses. This trend is expected to continue and accelerate in the second half
as a result of recent project wins and new business activity as MediaZest
targets year-on-year growth and a return to profitability.
Financial Highlights H1 FY24 H1 FY23
£’000 £’000
Revenue 1,173 1,054
Gross Profit 701 599
Gross Margin 60% 57%
EBITDA(1) (28) (148)
(Loss) after tax (141) (260)
(Loss) per share (pence) (0.0092) (0.0186)
Cash 14 10
(1) EBITDA is defined as (Loss)/Profit before tax adding back Finance costs,
depreciation and amortisation
Operational Highlights
* Positive H1 FY24 performance driven by long-term project roll outs with key
customers including Hyundai and Pets at Home
* Continued good visibility over recurring revenue streams which remained
consistent during the Period
* Work completed on further Lululemon Athletica stores as MediaZest continues
to work with them across Europe
* First LED videowall delivered for Arc’Teryx in its new Covent Garden
flagship store
Post-period end & Outlook
* Strong start to H2 FY24, with a series of new orders from a wide range of
well-known brands
* New business wins include installations in the Netherlands, Germany and
France, to be delivered in H2 FY24 and the pipeline of potential new project
work in Europe continues to expand
* Follow-on contract to supply digital signage to a large global automotive
client across several of its sites in an EU country announced in May 2024
* Strong long-term demand for audio-visual technology in MediaZest’s three
core sectors (retail, automotive and corporate offices)
* Positive Outlook – aiming to build on the progress in H1 and generate
positive growth organically and targeting a return to profitability for the
full financial year ending 30 September 2024, whilst continuing to evaluate
suitable parties for a potential “Buy and build” acquisition
Geoff Robertson, Group Chief Executive, commented: “With an improvement in
the first half results compared to 2023 and a strong start to the second half,
we remain confident that this momentum will continue and result in an improved
overall performance for the year.
“We were delighted to announce a follow-on contract with a large global
automotive client last month, which will provide additional revenues of around
€150,000 in the short to medium term and which will contribute to recurring
revenue streams. Our project pipeline continues to grow and we expect further
contract confirmations before the financial year end.”
Enquires
MediaZest Plc www.mediazest.com
Geoff Robertson, Chief Executive Officer via Walbrook PR
SP Angel Corporate Finance LLP (Nomad) Tel: +44 (0)20 3470 0470
David Hignell/Adam Cowl
Hybridan LLP (Corporate Broker) Tel: +44 (0)20 3764 2341
Claire Noyce
Walbrook PR (Media & Investor Relations) Tel: +44 (0)20 7933 8780 or mediazest@walbrookpr.com
Paul McManus / Alice Woodings Mob: +44 (0)7980 541 893 / +44 (0)7407 804 654
About MediaZest (www.mediazest.com)
MediaZest is a creative audio-visual solutions provider that specialises in
delivering innovative digital signage and audio systems to leading retailers,
brand owners and corporations. The Group offers 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 in
February 2005.
CHAIRMAN’S STATEMENT
The Board presents the consolidated unaudited results for the six months ended
31 March 2024 for MediaZest plc and its wholly owned subsidiary companies
MediaZest International Ltd (“MDZI”) and MediaZest International BV
(“MDZBV”) (together “MediaZest” or the “Group”).
Overview
The Board pleased to deliver a much improved H1 FY24 performance. Whilst
revenues improved by 11%, gross profits increased by 17% with a greater mix of
more profitable recurring revenue projects compared to the prior year. EBITDA
and pre-tax losses were significantly reduced, with a positive start to H2
FY24 and a strong pipeline for the rest of the year and beyond, we believe the
outlook for MediaZest is very encouraging.
Operational Review
Positive H1 FY24 performance driven long term project roll outs with key
customers
The Company’s long-term client base remains consistent and continues to
generate new opportunities. During the Period, the Group provided digital
signage solutions to another tranche of stores for long-standing client, Pets
at Home, and continued to deliver new dealership experiences for Hyundai.
MediaZest also continues to provide and expand its ongoing professional
services in support of projects with these clients.
MediaZest also completed work on additional Lululemon Athletica stores as it
continues to work with the Group across Europe and delivered a first LED
videowall for Arc’Teryx in its new Covent Garden flagship store.
Other long-term clients such as Ted Baker, Halfords Autocentres, and Post
Office continued to utilise professional services provided by MediaZest,
including software licences, content management, support and maintenance. As
such, the Group continues to have good visibility over recurring revenue
streams which remained consistent.
Post-period end, we announced an agreement to deliver more projects for a
large global automotive client won which now includes providing solutions
across three European territories with the potential to expand this agreement
further. These projects are longer term, over a three-year period, and will
contribute to our recurring revenues for future periods.
Financial Review
Year-on-year improvement in results
* Revenue was £1,173,000, up 11% (H1 FY23: £1,054,000).
* Gross profit was up by 17% to £701,000 (H1 FY23: £599,000).
* Gross margin rose to 60% (H1 FY23: 57%) reflecting the improvement in
business compared to the prior period and the Group’s drive to higher margin
recurring revenue work.
* Administrative expenses before depreciation and amortisation were £803,000,
an increase of 8% (H1 FY23: £747,000) due to inflationary pressures and
increased marketing spend.
* EBITDA improved significantly to a loss of £28,000 (H1 FY23: loss of
£148,000).
* Net loss after taxation was £141,000 (H1 FY23: loss of £260,000).
* The basic and fully diluted loss per share was 0.0092 pence (H1 FY23: loss
per share 0.0186 pence).
* Cash and cash equivalents at 31 March 2024 were £14,000 (H1 FY23:
£10,000).
The Period showed considerable improvement on the prior comparative period and
also the second half of the previous financial year. EBITDA moved closer to
profitability reflecting increasing levels of new business, as long-term work
to deliver more recurring revenue contracts begins to take effect.
This trend is expected to continue and accelerate in the second half of the
financial year with recent project wins and new business activity.
Margins continue to be robust with the mix of services offered and also
reduced project revenues as a percentage of total revenue resulting in a
greater percentage of gross profit coming from recurring revenue contracts,
which typically have lower direct cost of sales.
The Board continues to keep a close eye on costs, however inflationary
pressures and additional investment in the sales and marketing process have
led to increases in costs during the Period, compared to the first six months
of the prior year.
In January 2024 the Group completed an equity placing, raising gross proceeds
of £120,000.
Outlook
Encouraging outlook for full year
The Board believes the outlook for the remainder of the financial year and
beyond is very encouraging. Several large new projects have been won which
will be delivered in the period. This is expected to be reflected in improving
financial results in the second half of the financial year.
MediaZest continues to seek new opportunities in Europe which has been an area
showing significant potential for the Group. The Netherlands subsidiary
continues to perform well and attract client interest, allowing the Group to
better facilitate project delivery and logistics and to capitalise on these
new opportunities within the EU.
Recurring revenue streams have been robust and the Company continues to target
the growth of these, in addition to new client wins.
At a strategic level, the Board believes adding scale to the current
operational business via acquisition would unlock shareholder value. The Group
continues to evaluate potential targets in the market that may be suitable,
whilst remaining focussed on the opportunities provided by recent organic
growth.
Whilst the three markets in which the Group primarily operates – Retail,
Automotive and Corporate – are seeing strong long term demand, the Board
remains mindful of macro-economic uncertainty but remains optimistic that
current growth will continue. We continue to monitor and control the cost base
carefully, whilst balancing the growth of the business and continuing to seek
additional clients and projects. The Board remains confident in MediaZest’s
ability to deliver year-on-year growth, alongside targeting a return to
profitability, and continues to be positive about the Group's future
potential.
Lance O’Neill
Chairman
28 June 2024
MediaZest Plc
Unaudited Interim Results for the six months ended 31 March 2024
MediaZest’s interim results are set out below, with comparisons to the same
period in the previous year, as well as to MediaZest’s audited results for
the year ended 30 September 2023.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31
MARCH 2024
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
Note £'000 £'000 £'000
Continuing Operations
Revenue 1,173 1,054 2,335
Cost of sales (472) (455) (1,073)
Gross profit 701 599 1,262
Administrative expenses before depreciation and amortisation (803) (747) (1,487)
Exceptional items - - (97)
EBITDA (28) (148) (322)
Administrative expenses - depreciation and amortisation (38) (31) (67)
Operating (loss)/profit (66) (179) (389)
Finance costs (75) (81) (164)
Profit / (Loss) before taxation (141) (260) (553)
Taxation - -
(Loss)/profit for the period and total comprehensive loss/income for the period attributable to the owners of the parent (141) (260) (553)
(Loss)/profit per ordinary 0.1p share
Basic 2 (0.0092) (0.0186) (0.0396)
Diluted 2 (0.0092) (0.0186) (0.0396)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2024
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
Note £'000 £'000 £'000
ASSETS
Non-current assets
Goodwill 2,772 2,772 2,772
Owned - Property plant and equipment 44 51 60
Right of Use - Property plant and equipment 15 60 37
Total non-current assets 2,831 2,883 2,869
Current assets
Inventories 85 117 97
Trade and other receivables 551 301 406
Cash and cash equivalents 4 14 10 40
Total current assets 650 428 543
TOTAL ASSETS 3,481 3,311 3,412
EQUITY
Shareholders' Equity
Called up Share capital 3,686 3,656 3,656
Share premium account 5,334 5,244 5,244
Share options reserve 146 146 146
Retained earnings (8,500) (8,065) (8,358)
TOTAL EQUITY 666 981 688
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings 7 70 195
Current liabilities
Trade and other payables 1,284 991 1,308
Interest bearing loans and borrowings 1,524 1,269 1,221
Total current liabilities 2,808 2,260 2,529
TOTAL LIABILITIES 2,815 2,330 2,724
TOTAL EQUITY AND LIABILITIES 3,481 3,311 3,412
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH
2024
Share Share Share Options Retained Total
Capital Premium Reserve Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 30 September 2022 3,656 5,244 146 (7,805) 1,241
Loss for the period - - - (260) (260)
Total comprehensive loss for the period - - - (260) (260)
Balance at 31 March 2023 3,656 5,244 146 (8,065) 981
Loss for the period - - - (293) (293)
Total comprehensive loss for the period - - - (293) (293)
Balance at 30 September 2023 3,656 5,244 146 (8,358) 688
Profit for the period - - - (141) (141)
Total comprehensive loss for the period - - - (141) (141)
Issue of new shares 30 90 - - 120
Balance at 31 March 2024 3,686 5,334 146 (8,500) 667
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 MARCH 2024
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated from/(absorbed by) operations 3 (185) 119 162
Taxation - 0 0
Net cash generated by/(used in) operating activities (185) 119 162
Cash flows used in investing activities
Purchase of property, plant and equipment - (25) (47)
Sale of tangible fixed assets - - 16
Net cash used in investing activities - (25) (31)
Cash flows from financing activities
Other loans repayments (5) (4) 30
Shareholder loan receipts 66 88 131
Bounce back loan (repayments)/receipts (5) (5) (10)
Invoice financing (repayments)/receipts 91 (168) (154)
Payment of lease liabilities (33) (12) (50)
Share issue proceeds 120 - -
Interest paid (75) (28) (83)
Net cash (used in) / generated from financing activities 159 (129) (136)
(Decrease)/increase in cash and cash equivalents (26) (35) (5)
Cash and cash equivalents at beginning of period 40 45 45
Cash and cash equivalents at end of the year 4 14 10 40
NOTES TO THE FINANCIAL INFORMATION
1. Basis of Preparation
The Group’s annual financial statements are prepared in accordance with UK
adopted International Accounting Standards and, accordingly, the consolidated
six-month financial information in this report has been prepared on the same
basis. The financial statements have been prepared under the historical cost
convention.
The International Accounting Standards are subject to amendment and
interpretation by the International Accounting Standards Board (IASB). The
financial information has been prepared on the basis of UK adopted
international accounting standards expected to be applicable as at 30
September 2024.
This interim report does not comply with IAS 34 “Interim Financial
Reporting” 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. These projections reflect the
improvement in business post period end, as noted in the review above, and the
associated improvement in financial results and therefore cash generation in
the second half of the financial year ended 30 September 2024.
In addition, these forecasts have been considered in the light of the ongoing
challenges in the global economy as a result of inflationary pressures, the
legacy of the Covid-19 pandemic, war in Ukraine, consequences of the UK Brexit
agreement, and previous experience of the markets in which the Group operates
and the seasonal nature of those markets.
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.
The main operating business, MediaZest International Limited, retains long
term relationships with major clients and is developing further large clients
and continues to win new project business. As such the Board believes the
long-term outlook for the group is positive and no impairment is necessary to
the carrying value of this asset
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 30 September 2023 have been filed
with the Registrar of Companies. The report of the auditors on those statutory
accounts was unqualified and did not contain a statement under section 498(2)
or 498(3) of the Companies Act 2006. The audit report drew attention by way of
emphasis to a material uncertainty relating to going concern.
The financial information for the six months to 31 March 2024 has not been
audited.
1. Earnings per Share
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
(Loss)/profit after tax £000 (141) (260) (553)
Weighted average numbers of shares 1,530,852,004 1,396,425,774 1,396,425,774
Basic earnings per share (pence) (0.0092) (0.0186) (0.0396)
Diluted earnings per share (pence) (0.0092) (0.0186) (0.0396)
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.
1. Cash from operating activities
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
£'000 £'000 £'000
(Loss)/profit after tax (141) (260) (553)
Depreciation/amortisation charge 38 31 67
Profit on disposal of fixed assets - - (16)
Finance Costs 75 81 164
Decrease/(increase) in inventories 12 4 24
(Decrease)/increase in payables (24) (110) 268
Decrease/(increase) in receivables (145) 373 208
Cash from operating activities (185) 119 162
4. Cash and cash equivalents
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-24 31-Mar-23 30-Sep-23
£'000 £'000 £'000
Cash in hand 14 10 40
5. Subsequent events
There were no significant subsequent events.
6. Distribution of the interim report
Copies of the interim 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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