("MediaZest", the "Company” or “Group"; AIM: MDZ)
Unaudited results
for the six months ended 30 September
2018
MediaZest, the creative audio-visual
company, is pleased to provide shareholders with unaudited interim
results for the six months ended 30
September 2018.
CHAIRMAN’S
STATEMENT
Introduction
The Board presents the consolidated unaudited results for the
six months ended 30 September 2018
for MediaZest plc and its wholly owned subsidiary company MediaZest
International Ltd (together the “Group”).
Financial Review
-
Revenue for the period was £1,819,000, up 36% (2017:
£1,339,000).
-
Gross profit was £932,000, up 45% (2017: £643,000).
-
Gross margins improved to 51% (2017: 48%).
-
EBITDA was a profit of £156,000 (2017: loss £87,000).
-
Net profit for the period after taxation of £90,000 (2017: loss
of £149,000).
-
The basic and fully diluted earnings per share was 0.0001 pence (2017: loss per share 0.01 pence).
-
Cash in hand at period end was £12,000 (2017: £103,000),
although following period end additional monies were received/are
expected shortly from a material overdue debtor.
Operational Review
Results for the six months to 30
September 2018 were considerably better than for the
comparable prior period with improvement in both revenue and
profitability. The Group reported a net profit after tax and at the
EBITDA level for the first time.
Revenue improved by £480,000 reflecting prestigious projects for
clients including HP, the European Bank for Reconstruction and
Development (EBRD), Ford, Mitsubishi, Kuoni, Ted Baker and Tiffany & Co. Revenues for
three of these projects included amounts delayed from the previous
period, although in addition the six months also showed growth in
client business outside those mentioned above, with several roll
out opportunities beginning to develop.
Recurring revenues also continued to grow in the period and the
current run rate for these is over £700,000 per annum (2017:
approximately £600,000). The Board is targeting a run rate of
£800,000 worth of recurring revenues by the end of the financial
year, which would cover almost 50% of the cost base.
Profit margins were enhanced by the growth in the recurring
revenues generated by the Company. The Board continues to view this
as an important focal point which enables management to have
greater clarity on future revenues and to plan operational
capabilities from a position of strength. This wider focus on
managed services instead of on low margin hardware supply continues
to reap benefits, both in gross margin percentage and market
positioning.
Administrative costs remained largely unchanged with reduced
amortisation and depreciation costs being offset by a small
increase in engineering resources to meet the additional workload
generated by recurring contract growth. The Company continues to
run a very lean team of dedicated in house staff with resources
maximised to meet client and stakeholder demands.
Financing
The statement of financial position was improved by way of a
reduction in trade and other payables, whilst financial liabilities
have been maintained at a consistent level to the prior period.
Cash in hand was, however, lower than the comparable prior year due
to late receipts from one client of €130,000 which was overdue at
the period end date. The majority of this money has now been
received and the balance is expected shortly. No bad debt provision
is required, however the delay in payment has adversely affected
cashflow during the period and the closing cash balance. Despite
this late payment, and the growth in Revenue, trade debtors have
remained consistent with the prior period.
Corporate Governance
The Company adopted the QCA Corporate Governance code in
September 2018 and has strengthened
the Board by adding James Abdool as
a non-executive director.
Outlook
As highlighted in previous statements, the Group is having
considerable success with overseas deployments, primarily in
Europe, but also on a global
basis. Clients such as HP, Ted
Baker, Nokia, Lululemon and Opel have all engaged the
Group’s services outside of the UK in the six month period,
representing approximately 30% of gross profit.
The Group continues to target these opportunities, particularly
during a time when the domestic UK retail market is under pressure,
leading to uncertainty, which can result in the postponement of or
delay in retail investment from some UK participants.
Notwithstanding, the Group is developing, currently, several roll
out / substantial deployment opportunities which would enable the
Company to show further progress both in the current and future
reporting periods.
Lance O’Neill
Chairman
5 November 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME |
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
Notes |
30-Sep-18 |
30-Sep-17 |
31-Mar-18 |
|
|
£'000 |
£'000 |
£'000 |
Continuing
Operations |
|
|
|
|
Revenue |
|
1,819 |
1,339 |
2,819 |
Cost of sales |
|
(887) |
(696) |
(1,458) |
|
|
------------ |
------------ |
------------ |
Gross
profit |
|
932 |
643 |
1,361 |
|
|
|
|
|
Administrative
expenses |
|
(776) |
(730) |
(1,474) |
|
|
------------ |
------------ |
------------ |
|
|
|
|
|
EBITDA |
|
156 |
(87) |
(113) |
|
|
|
|
|
Administrative
expenses – depreciation & amortisation |
|
(10) |
(28) |
(41) |
|
|
------------ |
------------ |
------------ |
Operating
Profit/(Loss) |
|
146 |
(115) |
(154) |
|
|
|
|
|
Finance Costs |
|
(56) |
(34) |
(102) |
|
|
------------ |
------------ |
------------ |
Profit/(Loss)
before taxation |
|
90 |
(149) |
(256) |
|
|
|
|
|
Taxation |
|
- |
- |
- |
|
|
======== |
======== |
======== |
Profit/(Loss) for
the period and total comprehensive income/loss for the period
attributable to the owners of the parent |
|
90
======== |
(149)
======== |
(256)
======== |
|
|
|
|
|
Earnings/(Loss) per
ordinary 0.1p share |
|
|
|
|
Basic |
2 |
0.0001p |
(0.01p) |
(0.02p) |
Diluted |
2 |
0.0001p |
(0.01p) |
(0.02p) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION |
AS AT 30 SEPTEMBER 2018 |
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
As at
30-Sep-18 |
As at
30-Sep-17 |
As at
31-Mar-18 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Non-current assets |
|
|
|
Goodwill |
|
2,772 |
2,772 |
2,772 |
Property,
plant and equipment |
58 |
43 |
51 |
Intellectual property |
2 |
5 |
3 |
|
------------ |
------------ |
------------ |
Total non-current
assets |
|
2,832 |
2,820 |
2,826 |
|
|
|
|
|
Current
assets |
|
|
|
Inventories |
97 |
92 |
217 |
Trade and
other receivables |
596 |
585 |
897 |
Cash and
cash equivalents |
12 |
103 |
38 |
|
------------ |
------------ |
------------ |
Total
current assets |
705 |
780 |
1,152 |
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
Trade and
other payables |
(1,175) |
(1,284) |
(1,664) |
Financial
liabilities |
(434) |
(447) |
(471) |
|
------------ |
------------ |
------------ |
Total current
liabilities |
|
(1,609) |
(1,731) |
(2,135) |
|
|
|
|
|
|
|
|
|
|
Net
current liabilities |
(904) |
(951) |
(983) |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Financial
liabilities |
|
(17) |
(11) |
(22) |
|
|
------------ |
------------ |
------------ |
Total non-current
liabilities |
|
(17) |
(11) |
(22) |
|
|
|
|
|
|
|
======== |
======== |
======== |
Net assets |
|
1,911 |
1,858 |
1,821 |
|
|
======== |
======== |
======== |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Share
Capital |
3,546 |
3,499 |
3,546 |
Share
premium account |
5,244 |
5,221 |
5,244 |
Other
reserves |
146 |
146 |
146 |
Retained
earnings |
(7,025) |
(7,008) |
(7,115) |
|
======== |
======== |
======== |
Total
equity |
1,911 |
1,858 |
1,821 |
|
======== |
======== |
======== |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018
|
|
|
|
|
|
|
|
Share |
Share |
Share
Options |
Retained |
Total |
|
Capital |
Premium |
Reserves |
Earnings |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Balance at 31 March
2017 |
3,499 |
5,221 |
146 |
(6,859) |
2,007 |
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
(149) |
(149) |
|
----------- |
------------ |
------------------ |
------------ |
------------ |
Total comprehensive
loss for the period |
- |
- |
- |
(149) |
(149) |
|
======= |
======= |
======== |
======= |
======= |
Balance at 30
September 2017 |
3,499 |
5,221 |
146 |
(7,008) |
1,858 |
|
======= |
======= |
======== |
======= |
======= |
|
|
|
|
|
|
Loss for the
period |
- |
- |
- |
(107) |
(107) |
|
------------ |
------------ |
------------------ |
------------ |
------------ |
Total comprehensive
loss for the period |
- |
- |
- |
(107) |
(107) |
|
|
|
|
|
|
Issue of share
capital |
47 |
24 |
- |
- |
71 |
Share issue costs |
- |
(1) |
- |
- |
(1) |
|
======= |
======== |
========= |
======= |
======= |
Balance at 31 March
2018 |
3,546 |
5,244 |
146 |
(7,115) |
1,821 |
|
======= |
======== |
========= |
======= |
======= |
|
|
|
|
|
|
Profit for the
period |
- |
- |
- |
90 |
90 |
|
------------ |
------------- |
---------------- |
------------ |
----------- |
Total comprehensive
income for the period |
- |
- |
- |
90 |
90 |
|
======= |
======== |
========= |
======= |
======= |
Balance at 30
September 2018 |
3,546 |
5,244 |
146 |
(7,025) |
1,911 |
|
======= |
======== |
========= |
======= |
======= |
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018 |
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12 months |
|
Note |
30-Sep-18 |
30-Sep-17 |
31-Mar-18 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Net cash generated
from/(used in) operating activities |
3 |
143 |
(195) |
(434) |
|
|
|
|
|
Taxation |
|
- |
- |
- |
|
|
|
|
|
Cash flows used in
investing activities |
|
|
|
|
Purchase of plant and
machinery |
|
(13) |
(10) |
(5) |
Purchase of
intellectual property |
|
- |
(2) |
(2) |
Purchase of leasehold
improvements |
|
(3) |
- |
- |
|
|
---------- |
---------- |
---------- |
Net cash used in
investing activities |
|
(16) |
(12) |
(7) |
|
|
|
|
|
Cash flow from
financing activities |
|
|
|
|
Other loan
repayments |
|
(13) |
(10) |
(40) |
Shareholder loan
receipts |
|
- |
32 |
233 |
Shareholder loan
repayments |
|
(68) |
- |
(213) |
Interest paid |
|
(17) |
(40) |
(54) |
Proceeds of share
issue |
|
- |
- |
70 |
|
|
---------- |
---------- |
---------- |
Net cash used in
financing activities |
|
(98) |
(18) |
(4) |
|
|
|
|
|
|
|
---------- |
--------- |
---------- |
Net
increase/(decrease) in cash and cash equivalents |
|
29 |
(225) |
(445) |
|
|
---------- |
---------- |
---------- |
|
|
|
|
|
Cash and cash
equivalents at beginning of period / year |
|
(353) |
92 |
92 |
|
|
======= |
======= |
======= |
Cash and cash
equivalents at end of period / year |
4 |
(324) |
(133) |
(353) |
|
|
======= |
======= |
======= |
|
|
|
|
|
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NOTES
TO THE FINANCIAL INFORMATION |
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1.
Basis of preparation |
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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 2019.
The Board has considered the impact of IFRS9 and IFRS15 when
drawing up these financial statements, and deems no adjustments
necessary. |
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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. |
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Going
Concern |
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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. |
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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. |
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Non-statutory accounts |
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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”). |
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The
statutory accounts for the year ended 31 March 2018 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 2018 and 30 September 2017 is
not audited. |
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2.
Earnings per share |
|
Basic
earnings per share is calculated by dividing the profit attributed
to ordinary shareholders of £90,000 (2017: loss of £149,000) by the
weighted average number of shares during the period of
1,286,425,774 (2017: 1,239,757,641). The diluted earnings per share
is identical to that used for basic earnings per share as the
warrants or share options are anti-dilutive. |
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3.
Cash generated from/(used in) operations |
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
|
30-Sep-18 |
30-Sep-17 |
31-Mar-18 |
|
|
£'000 |
£'000 |
£'000 |
Operating profit /
(loss) |
|
146 |
(115) |
(256) |
Depreciation of
tangible assets |
|
9 |
18 |
- |
Finance Costs |
|
56 |
34 |
102 |
Amortisation of
intangible assets |
|
1 |
10 |
41 |
Decrease / (increase)
in inventories |
|
118 |
(23) |
(148) |
(Decrease) / increase
in payables |
|
(488) |
223 |
481 |
Decrease / (increase)
in receivables |
|
301 |
(342) |
(654) |
|
|
======== |
======== |
======== |
Net cash outflow
from operating activities |
|
143 |
(195) |
(434) |
|
|
======== |
======== |
======== |
|
|
|
|
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4.
Cash and cash equivalents |
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Six
months |
Six
months |
12
months |
|
|
30-Sep-18 |
30-Sep-17 |
31-Mar-18 |
|
|
£'000 |
£'000 |
£'000 |
Cash held at bank |
|
12 |
103 |
38 |
Invoice discounting
facility |
|
(336) |
(236) |
(391) |
|
|
======== |
======== |
======== |
|
|
(324) |
(133) |
(353) |
|
|
======== |
======== |
======== |
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5.
Subsequent events |
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£47,000 of
cash was received from a major client post 30 September 2018 in
payment of long-overdue invoices. Another payment of £53,000 is
expected from the same client in early November relating to further
invoices currently over due by 120 days or more. Had this cash been
received within payment terms, the bank balance at 30 September
2018 would have been significantly improved. |
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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.
This announcement contains inside information for the purposes of
Article 7 of Regulation (EU) 596/2014. |
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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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David Hignell / Edward
Hutton |
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Nominated Adviser |
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Northland Capital
Partners Limited |
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020 3861 6625 |
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Claire Noyce |
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Broker |
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Hybridan LLP |
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020 3764 2341 |
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