REG-MediaZest Plc: Unaudited Interim Results
28/06/2021 07:05
28 June 2021
MediaZest Plc
("MediaZest", the "Company” or “Group"; AIM: MDZ)
Unaudited Interim Results for the six months ended 31 March 2021
MediaZest, the creative audio-visual company, announces its unaudited interim
results for the six months ended 31 March 2021 (the “Period”).
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 18 month period ended 30 September 2020.
CHAIRMAN’S STATEMENT
Introduction
The Board presents the consolidated unaudited results for the six months ended
31 March 2021 for MediaZest plc and its wholly owned subsidiary company
MediaZest International Ltd (together the “Group”).
Financial Review
* Revenue for the Period was £846,000, down 42% (2020: £1,454,000) due to
the impact of Covid-19.
* Gross profit was down 38% accordingly to £410,000 (2020: £656,000).
* Gross margin rose to 48% (2020: 45%).
* Administrative expenses were £459,000, a reduction of 31% (2020:
£667,000).
* EBITDA was a loss of £49,000 (2020: £11,000).
* Net loss for the period after taxation was £160,000 (2020: £43,000).
* The basic and fully diluted loss per share was 0.0115 pence (2020: loss per
share 0.0031 pence).
* Cash in hand at 31 March 2021 was £16,000 (2020: £16,000).
Operational Review
As highlighted in the Financial Review above, the unaudited financial results
for the six months to 31 March 2021 were adversely affected by nationwide UK
“lockdowns” in response to the ongoing Covid-19 pandemic (the
“Pandemic”), by way of comparison with the prior period.
However, since the end of the Period, business has improved significantly and
the Group is extremely busy pitching and delivering projects for a wide range
of both existing and new clients.
During December 2020 and January 2021 many clients ceased on-site installation
work, with projects only beginning to recommence from early February 2021
onwards. This had a negative impact on financial results, particularly in
January and February of 2021, the latter also impacted by the timing of
revenue recognition under IFRS 15.
As noted in recent announcements, since the beginning of the calendar year the
Group has seen a significant increase in new opportunities and in committed
projects. The timing of these projects themselves and recognition of the
resultant revenue to the Group (in accordance with accounting standards), has
resulted in the benefit of these new business wins being recognised in the
second half of the financial year rather than during the Period.
In light of the Pandemic, the Group continued to work hard to keep costs low
during the 6 months and utilised the Government Job Retention Scheme
appropriately during the Period.
Additional financing was not required and in the post balance sheet period the
Group has been able to repay some shareholder debt using free cashflow from
trading.
Client Work in the Period
The Group continued to work with long term clients such as Lululemon
Athletica, Pets at Home, Ted Baker, and Hyundai during the Period, with new
project installations as well as ongoing service and maintenance contractual
work.
New store installations for Dermologica, Samsung and a number of digital kiosk
projects did also go ahead at the beginning of these 6 months, and again
towards the end of the Period as lockdown measures eased once more.
A number of new clients were added during the Period with smaller initial
projects but the potential to grow into more significant engagements in the
future.
Significant wins being delivered Post Period included the Vashi Covent Garden
project, announced recently on 18 June and forthcoming new projects with
Hyundai and Samsung.
Gross margins continued to hold up well reflecting the strong balance towards
the Group’s high-quality managed service offering.
Outlook
It remains difficult to assess the extent to which the Pandemic will affect
the Group’s forthcoming trading and financial performance as the situation
continues to evolve rapidly with the final stage of ‘unlocking’, which
was scheduled for 21 June, being deferred to 19 July in the light of recent
data.
However, the number of new projects currently underway or already completed in
the second half of the year has been encouraging and the Board is looking for
the Group to deliver a much improved second half of Financial Year 21.
Recurring revenue streams have been robust throughout the last 18 months and
contracts continue to extend and grow in many cases. Developing these
contracts and growing opportunities that focus on this type of business has
been a priority in recent years and continues to show success and generate
long term value in the Group.
Performance of the Group over the second six months and into the next
financial year looks encouraging, subject to the uncertainty within which many
businesses are currently operating.
The Board continues to work on the assumption that the disruption caused by
the Pandemic will have an impact throughout 2021 and continues to plan
accordingly, searching for new revenue streams whilst managing costs tightly.
Lance O’Neill
Chairman
28 June 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MARCH 2021
Unaudited Unaudited Audited
6 months 6 months 18 months
Notes 31-Mar-21 31-Mar-20 30-Sep-20
£’000 £'000 £'000
Continuing Operations
Revenue 846 1,454 3,068
Cost of sales (436) (798) (1,544)
------------ ------------ ------------
Gross profit 410 656 1,524
Other operating income - - 25
Administrative expenses before depreciation and amortisation (459) (667) (1,735)
------------ ------------ ------------
EBITDA (49) (11) (186)
Administrative expenses – depreciation & amortisation (38) (41) (124)
------------ ------------ ------------
Operating (Loss)/Profit (87) (52) (310)
Finance Costs (73) (31) (168)
------------ ------------ ------------
(Loss)/Profit before taxation (160) (83) (478)
Taxation - 40 30
======== ======== ========
(Loss)/Profit for the period and total comprehensive loss/income for the period attributable to the owners of the parent (160) ======== (43) ======== (448) ========
Earnings/(Loss) per ordinary 0.01p (2020: 0.01p) share
Basic 2 (0.0115)p (0.0031)p (0.0324)p
Diluted 2 (0.0115)p (0.0031)p (0.0324)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
Unaudited Unaudited Audited
As at 31-Mar-21 As at 31-Mar-20 As at 30-Sep-20
£’000 £'000 £'000
ASSETS Non-current assets
Goodwill 2,772 2,772 2,772
Owned Property, plant and equipment 25 54 39
Right-of-use Property, plant and equipment 149 157 171
------------ ------------ ------------
2,946 2,983 2,982
Current assets
Inventories 238 116 93
Trade and other receivables 408 548 493
Cash and cash equivalents 16 16 91
------------ ------------ ------------
662 680 677
TOTAL ASSETS 3,608 3,663 3,659
======== ======== ========
EQUITY
Shareholders’ Equity
Called up share capital 3,656 3,656 3,656
Share premium 5,244 5,244 5,244
Share option reserve 146 146 146
Retained earnings (7,837) (7,500) (7,677)
------------ ------------ ------------
TOTAL EQUITY 1,209 1,546 1,369
======== ======== ========
LIABILITIES
Non-current liabilities
Financial liabilities – borrowings:
Interest bearing lease liabilities 136 118 157
Other interest bearing loans and borrowings 182 - 176
------------ ------------ ------------
318 118 333
Current liabilities
Trade and other payables 1,175 1,252 968
Financial liabilities – borrowings:
Invoice discounting facility 131 183 245
Interest bearing lease liabilities 55 54 59
Other interest bearing loans and borrowings 720 510 685
------------ ------------ ------------
2,081 1,999 1,957
TOTAL LIABILITIES 2,399 2,117 2,290
======== ======== ========
TOTAL EQUITY AND LIABILITIES 3,608 3,663 3,659
======== ======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 MARCH 2021
Share Share Share Options Retained Total
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
Balance at 31 March 2019 3,656 5,244 146 (7,227) 1,819
Impact of IFRS 16 implementation - - - (2) (2)
======= ======== ========= ======= =======
Balance at 1 April 2019 restated 3,656 5,244 146 (7,229) 1,817
======= ======== ========= ======= =======
Loss for the year - - - (271) (271)
----------- ----------- ----------- ----------- -----------
Total comprehensive loss for the year - - - (271) (271)
======= ======== ========= ======= =======
Balance at 31 March 2020 3,656 5,244 146 (7,500) 1,546
======= ======== ========= ======= ======
Loss for the period - - - (177) (177)
----------- ----------- ----------- ----------- -----------
Total comprehensive loss for the period - - - (177) (177)
======= ======== ========= ======= =======
Balance at 30 September 2020 3,656 5,244 146 (7,677) 1,369
======= ======== ========= ======= =======
Loss for the period - - - (160) (160)
----------- ----------- ----------- ----------- -----------
Total comprehensive loss for the period - - - (160) (160)
======= ======== ========= ======= =======
Balance at 31 March 2021 3,656 5,244 146 (7,837) 1,209
======= ======== ========= ======= =======
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 MARCH 2021
Unaudited Unaudited Audited
6 months 6 months 18 months
Note 31-Mar-21 31-Mar-20 30-Sep-20
£'000 £'000
Net cash generated from operating activities 3 94 (14) (73)
Taxation - 40 30
---------- ---------- ----------
Net cash generated from operating activities 94 26 (43)
Cash flows used in investing activities
Purchase of plant and machinery (2) 8 (29)
---------- ---------- ----------
Net cash used in investing activities (2) 8 (29)
Cash flow from financing activities
Other loans (5) 19 (16)
Bounce back loan - - 50
Lease liability payments (20) (46) (47)
Shareholder loan receipts - 218 718
Shareholder loan repayments - (219) (515)
Interest paid (28) (28) (93)
---------- ---------- ----------
Net cash (used in)/ generated from financing activities (53) (56) 97
---------- ---------- ----------
Net increase in cash and cash equivalents 39 (22) 25
---------- ---------- ----------
Cash and cash equivalents at beginning of year (154) (145) (179)
======= ======= =======
Cash and cash equivalents at end of year 4 (115) (167) (154)
======= ======= =======
NOTES TO THE FINANCIAL INFORMATION
1. Basis of Preparation
The Group’s annual financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.
Accordingly, the consolidated six-month financial information in this report has been prepared using accounting policies consistent with international accounting standards. 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 international accounting standards expected to be applicable as at 30 September 2021.
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. 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 ongoing impact of the Covid-19 pandemic. 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 18 months ended 30 September 2020 have been filed with the Registrar of Companies. The report of the auditors on those statutory accounts was unqualified, did include a reference to which the auditor drew attention by way of emphasis without qualifying their report in respect of going concern and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the six months to 31 March 2021 has not been audited.
2. Earnings per share
Basic earnings per share is calculated by dividing the loss attributed to ordinary shareholders of £160,000 (2020: £43,000) by the weighted average number of shares during the period of 1,396,425,774 (2020: 1,396,425,774). The diluted earnings per share is identical to that used for basic earnings per share as the warrants or share options are anti-dilutive.
3. Cash generated from operations
Unaudited Unaudited Audited
6 months 6 months 18 months
31-Mar-21 31-Mar-20 30-Sep-20
£'000 £'000
Loss after tax (160) (50) (478)
Taxation - - 30
Depreciation/amortisation charge 38 41 125
Finance Costs 26 38 73
Increase in inventories (145) (18) (24)
Increase in payables 252 169 242
Decrease/(increase) in receivables 83 (194) (41)
======== ======== ========
Net cash generated from/(absorbed by) operating activities 94 (14) (73)
======== ======== ========
4. Cash and cash equivalents
Unaudited Unaudited Audited
6 months 6 months 18 months
31-Mar-21 31-Mar-20 30-Sep-20
£'000 £'000 £'000
Cash held at bank 16 16 91
Invoice discounting facility (131) (183) (245)
======== ======== ========
(115) (167) (154)
======== ======== ========
5. Subsequent events
Subsequent to 31 March 2021, the Government’s “roadmap” out of “lockdown” has seen the re-opening of many of the Group’s clients’ stores, especially in the retail sector, and an upswing in new projects coming through the pipeline, with the expectation that the second half of the financial year ending 30 September 2021 will show significant improvement. The repayment of the Group’s Bounce Back Loan of £50,000 under the Government’s scheme, is due to commence from June 2021 at £887 per month. Interest on the £150,000 Convertible Loan Note instrument, secured in August 2020 to provide additional working capital for the Group, is being paid quarterly at an annual rate of 7%. In the post balance sheet period the Group has been able to
repay some shareholder debt using free cashflow from trading.
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. 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.
Enquiries:
Geoff Robertson Chief Executive Officer MediaZest Plc 0845 207 9378
David Hignell/Adam Cowl Nominated Adviser SP Angel Corporate 020 3470 0470
Finance LLP
Claire Noyce Broker Hybridan LLP 020 3764 2341
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