REG-MediaZest Plc: Unaudited Interim Results
30/06/2023 07:15
30 June 2023
MediaZest Plc
("MediaZest", the "Company” or “Group"; AIM: MDZ)
Unaudited Interim Results for the six months ended 31 March 2023
MediaZest, the creative audio-visual company, announces its unaudited interim
results for the six months ended 31 March 2023 (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 year ended 30 September 2022.
CHAIRMAN’S STATEMENT
Introduction
The Board presents the consolidated unaudited results for the six months ended
31 March 2023 for MediaZest plc and its wholly owned subsidiary company
MediaZest International Ltd (“MDZI”) (together the “Group”).
Financial Review
* Revenue for the Period was £1,054,000, down 25% (2022: £1,402,000) due to
delays to client projects, subsequently happening in the second half of the
financial year.
* Gross profit was down by 21% accordingly to £599,000 (2022: £756,000).
* Gross margin rose to 57% (2022: 54%) with a greater percentage of revenue
generated from higher margin managed services than from hardware sales.
* Administrative expenses before depreciation and amortisation were £747,000,
an increase of 21% (2022: £618,000) due to inflationary pressures and
increased marketing spend.
* EBITDA was a loss of £148,000 (2022: profit of £138,000).
* Net loss for the period after taxation was £260,000 (2022: profit of
£40,000).
* The basic and fully diluted loss per share was 0.0186 pence (2022: profit
per share 0.029 pence).
* Cash and cash equivalents at 31 March 2023 were £10,000 (2022: £46,000).
Operational Review
Following a strong improvement during the financial year ended 30 September
2022, macro-economic uncertainty and operational changes at key clients had a
profound impact on the Group’s performance during the Period, particularly
in the first quarter of calendar year 2023. This resulted in delays to a major
client roll out project whilst design format changes were made, a slower than
expected conclusion of deals in progress and hesitation over projects from new
clients, all of which led to a drop in revenue in the Period compared to H1
2022. The Board believes the latter two issues are related to customer
concerns regarding general market conditions, including inflationary
pressures.
Subsequent to the Period, these issues appear to have eased somewhat and the
second half of the Group’s financial year is expected to show a significant
improvement compared to the first half. In particular, the major client roll
out has now restarted, some significant projects are expected to close in the
run up to the summer period and several new clients have now placed orders.
Margins continue to be robust with the mix of services offered and also
reduced project revenues 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.
Client Work in the Period
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 between October and December
2022 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.
The Group added a new large global automotive client during the Period,
providing solutions in one European territory which it expects to expand to
further substantial work in the coming months.
MediaZest also completed work on additional Lululemon Athletica stores as it
continues to work with the Group across Europe. A notable project was the new
flagship store in Paris on the Champs Elysees which featured LED screens
behind the main cashdesk, internal digital signage and a ‘transparent’ LED
in one window. 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.
Engagements with new clients began including Rank Foundation and Wren Kitchens
and the Group continued to develop its relationships with recently won clients
such as Vodafone, with new projects completed and additional opportunities
under discussion.
The business development team has been supplemented and continues to identify
and work on new client projects. The Group has focussed on marketing during
the period to generate new opportunities and garner new clients.
Financing
Due to the strong results delivered in the prior year to 30 September 2022 and
improvement in business subsequent to the six months to 31 March 2023,
additional equity fundraising was again not required in the period.
The Group issued £150,000 of Convertible Loan Notes in August 2020 with a 3
year term. £20,000 of these will be repaid in August 2023, and the Group is
in discussion with the holders of the balances regarding potentially extending
or renewing these instruments. The Group will update on these discussions in
due course.
Outlook
The Board believes the outlook for the remainder of the financial year is
encouraging. Projects delayed from the first half of the year have now
commenced and some are completed, and that 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. In the Period, the Board
established an office in the Netherlands to better facilitate project delivery
and logistics and to capitalise on these new opportunities within the EU. The
first project delivered via this subsidiary is already underway.
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 an acquisition or acquisitions would unlock
shareholder value. The Group continues to evaluate potential targets in the
market that may be suitable, with considerable effort going into this
workstream over the most recent months.
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 headwinds in the coming months, already seen
in the first quarter of the calendar year. As such, the Group continues to
monitor and control the cost base carefully, whilst balancing the growth of
the business and continuing to seek additional clients and projects.
Lance O’Neill
Chairman
29 June 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31
MARCH 2023
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
Note £’000 £’000 £’000
Continuing Operations
Revenue 1,054 1,402 2,820
Cost of sales (455) (646) (1,321)
Gross profit 599 756 1,499
Administrative expenses before depreciation and amortisation (747) (618) (1,279)
EBITDA (148) 138 220
Administrative expenses – depreciation & amortisation (31) (32) (63)
Operating (Loss)/profit (179) 106 157
Finance costs (81) (66) (145)
(Loss)/profit before taxation (260) 40 12
Taxation - - -
(Loss)/profit for the period and total comprehensive loss / income for the period attributable to the owners of the parent (260) 40 12
(Loss)/earning per ordinary 0.1p (2022:0.01p) share
Basic 2 (0.0186) 0.0029p 0.0009
Diluted 2 (0.0186) 0.0029p 0.0009
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
Unaudited Unaudited Audited
2 6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
Note £’000 £’000 £’000
ASSETS
NON CURRENT ASSETS
Goodwill 2,772 2,772 2,772
Owned
Property, plant and equipment 51 27 34
Right of use
Property, plant and equipment 60 105 83
2,883 2,904 2,889
CURRENT ASSETS
Inventories 117 137 121
Trade and other receivables 301 545 674
Cash and other equivalents 4 10 46 45
428 728 840
TOTAL ASSETS 3,311 3,632 3,729
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital 3,656 3,656 3,656
Share premium 5,244 5,244 5,244
Share options reserve 146 146 146
Retained earning (8,065) (7,777) (7,805)
TOTAL EQUITY 981 1,269 1,241
LIABILITIES
NON CURRENT LIABILITIES
Financial liabilities – borrowings
Interest Bearing loans and borrowings 70 255 83
CURRENT LIABILITIES
Trade and other payables 991 983 1,101
Financial liabilities – borrowings
Interest bearing loans and borrowings 1,269 1,125 1,304
2,260 2,108 2,405
TOTAL LIABILITIES 2,330 2,363 2,488
TOTAL EQUITY AND LIABILITIES 3,311 3,632 3,729
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH
2023
Share Capital Share Premium Share Option Reserve Retained Earnings Total equity
£’000 £’000 £’000 £’000 £’000
Balance at 30 September 2021 3,656 5,244 146 (7,817) 1,229
Profit for the period - - - 40 40
Total comprehensive profit for the period - - - 40 40
Balance at 31 March 2022 3,656 5,244 146 (7,777) 1,269
Loss for the period - - - (28) (28)
Total comprehensive loss for the period - - - (28) (28)
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
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 MARCH 2023
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
Note £’000 £’000 £’000
Cash flows from operating activities
Cash from operating activities 3 119 (129) (24)
Taxation - - -
Net cash generated by/(used in) operating activities 119 (129) (24)
Cash flows used in investing activities
Purchase of property, plant and equipment (25) (19) (35)
Net cash from investing activities (25) (19) (35)
Cash flow from financing activities
Other loans payments (4) (5) 1
Shareholder loan receipts 88 145 15
Shareholder loan repayments - (80) -
Bounce back loan repayments (5) (5) (10)
Invoice financing (repayments)/receipts (168) 61 98
Lease liability payments (12) (23) (46)
Interest paid (28) (19) (74)
Net cash (used in) / generated from financing activities (129) 74 (16)
(Decrease) in cash and cash equivalents (35) (74) (75)
Cash and cash equivalents at beginning of period 45 120 120
Cash and cash equivalents at end of period 10 46 45
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 international
accounting standards expected to be applicable as at 30 September 2023.
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 2023.
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 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 2022 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 financial information for the six months to 31 March 2023 has not been
audited.
1. Earnings per Share
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
(Loss)/profit after tax (260) 40 12
Weighted average number of shares 1,396,425,774 1,396,425,774 1,396,425,774-
Basic earnings per share (pence) (0.0186) 0.0029p 0.0009
Diluted earnings per share (pence) (0.0186) 0.0029p 0.0009
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. Cash from operating activities
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
(Loss)/profit after tax (260) 40 12
Depreciation/amortisation charge 31 32 63
Finance Costs 81 18 145
Decrease/(increase) in inventories 4 (13) 29
(Decrease) in payables (110) (62) (13)
Decrease /(Increase) in receivables 373 (144) (260)
Cash from operating activities 119 (129) (24)
4. Cash and cash equivalents
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Mar 23 31 Mar 22 30 Sept 22
Cash in hand 10 46 45
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.
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.
Enquires
Geoff Robertson Chief Executive Officer MediaZest Plc 0845 207 9378
David Hignell/Adam Cowl Nominated Adviser SP Angel Corporate Finance LLP 020 3470 0470
Claire Noyce Broker Hybridan LLP 020 3764 2341
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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