Final Results and Annual Report

MediaZest plc ("MediaZest", the "Company" or the "Group"; AIM:MDZ) Final Results for the Year Ended 31 March 2013 CHAIRMAN'S STATEMENT Introduction The results for MediaZest plc (the "Group") for the year ended 31 March 2013incorporate the results of its subsidiary, which is wholly owned. Results for the Year and Key Performance Indicators Turnover for the year was £1,850,000 (2012: £2,521,000), cost of sales was£941,000 (2012: £1,394,000) and the Group made a loss for the year, aftertaxation, of £551,000 (2012: £424,000) after finance costs of £138,000 (2012:£104,000) and having paid administrative expenses of £1,322,000 (2012: £1,447,000). The basic loss and diluted loss per share was 0.15p (2012: 0.16p). The Grouphad cash in hand of £1,000 (2012: £88,000) and a bank overdraft of £92,000(2012: £nil) at the year end and an invoice discounting facility over thedebtors of Touch Vision of which £108,000 (2012: £84,000) was in use at 31March 2013. As at 31 March 2013, the Group has a current maximum limit of£350,000 under the existing invoice discounting facility. As at 31 March 2013 the Group also had loans from shareholders of £530,000(2012: £530,000). Business overview The Group operates two trading divisions through its wholly owned subsidiaryTouch Vision Ltd : Touch Vision (TV) and MediaZest Ventures (MV). TV trades asan Audio Visual supply and installation company whilst MV operates as a`digital out of home' creative agency. The results for the year ended 31 March 2013 demonstrate that the Group endureda disappointing year with turnover falling short of the previous year's leveland the loss for the year increasing accordingly. Much of this decrease inturnover was as a consequence of the rescheduling of a large project that wasanticipated to generate revenues of in excess of £400,000 in the financial yearended 31 March 2013, to the subsequent financial year (ending 31 March 2014).In addition, HMV, a long standing and valued client of the Company for manyyears went into administration in January 2013. Both of these events have beenannounced previously and referred to in the Group's interim report released inDecember 2012 and a subsequent trading update in June 2013. On a more positive note, the Company also announced in April 2013 that it hadwon a significant global contract that it expected to deliver revenues inexcess of £1 million over the subsequent 18 months. The Board believes thatthis contract offers significant future business opportunities for the Company. The Company raised £179,000 before expenses during the year and £358,000 beforeexpenses subsequent to the year end from both existing and new shareholders,the proceeds of which were applied towards both providing additional workingcapital and the financing to expand the sales team/marketing assets to takeadvantage of the opportunities before the Company. The Board's strategy, consistent with previous announcements, has been one ofincreasing turnover by concentrating on and increasing the higher marginbusiness achievable through MV whilst both maintaining and expanding revenuethrough the Education Framework agreements that TV became a participant of inNovember 2010. MediaZest Ventures Division MediaZest Ventures continued to provide the Group with growth potential byproviding the highest profile and most profitable opportunities. A considerableamount of effort was placed upon expanding the product and service base with anincreasing emphasis on providing clients with content work to complement thedivision's offerings. Touch Vision Division The Touch Vision division continued to generate the bulk of its business fromthe educational market during the year. In addition, amongst its retailcustomers, several high street names continued to be valued clients. However,further emphasis was placed on opportunities in the Corporate market and thisis a sector that will receive ongoing attention as the Board believes thatclients continue to search for better value solutions and reliable systemsproviders. Outlook The Group has continued to add to its client base of blue chip retailers andbrands and has an enviable record of client retention. In view of this and withthe objective of expanding the Group's business further the Company has takenon new business premises in Woking, moving from its current location inFarnham. It has also set up a demonstration showroom in Shoreditch in closeproximity to the City of London. There has been a successful start to the financial year ending 31 March 2014.The Group won its single largest piece of business in April 2013 and this alongwith several other substantial contracts have given the Company a strongbusiness base for this financial year. It has already booked revenue within thefirst five months of the current financial year significantly in excess of thecorresponding period in the financial year ending 31 March 2013. Lance O'NeillChairman ENQUIRIES Geoff Robertson 020 7724 5680Chief Executive OfficerMediaZest plc Gavin Burnell/Edward Hutton 020 7796 8800Nominated AdviserNorthland Capital Partners Ltd Claire Noyce/William Lynne 020 7947 4350 / 4361BrokerHybridan LLP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2013 Note 2013 2012 £'000 £'000 Continuing operations Revenue 1,850 2,521 Cost of sales (941) (1,394) Gross profit 909 1,127 Administrative expenses (1,322) (1,447) Operating loss 2 (413) (320) Finance costs (138) (104) Loss on ordinary activities before taxation (551) (424) Tax on loss on ordinary activities - - Loss for the year and total comprehensive loss for (551) (424)the year attributable to the owners of the parent Loss per ordinary 0.1p share Basic 3 (0.15p) (0.16p) Diluted 3 (0.15p) (0.16p) CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 MARCH 2013(Company No. 05151799) 2013 2012 £'000 £'000 Non-current assets Goodwill 2,772 2,772 Property, plant and machinery 63 97 Total non-current assets 2,835 2,869 Current assets Inventories 123 106 Trade and other receivables 515 270 Cash and cash equivalents 1 88 Total current assets 639 464 Current liabilities Trade and other payables (1,155) (789) Financial liabilities (707) (547) Total current liabilities (1,862) (1,336) Net current liabilities (1,223) (872) Non-current liabilities Financial liabilities - (8) Total non-current liabilities - (8) Net assets 1,612 1,989 Equity Share capital 2,736 2,587 Share premium account 4,029 4,004 Share options reserve 7 7 Retained earnings (5,160) (4,609) Total equity 1,612 1,989 CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2013 Share Share Share Options Retained Total Capital Premium Reserve Earnings Equity £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2011 2,507 3,929 7 (4,185) 2,258 Loss for the year - - - (424) (424) Total comprehensive income for the - - - (424) (424)year Issue of share capital 80 80 - - 160 Share issue costs - (5) - - (5) Balance at 31 March 2012 2,587 4,004 7 (4,609) 1,989 Loss for the year - - - (551) (551) Total comprehensive income for the - - - (551) (551)year Issue of share capital 149 30 - - 179 Share issue costs - (5) - - (5) Balance at 31 March 2013 2,736 4,029 7 (5,160) 1,612 CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 MARCH 2013 Note 2013 2012 £'000 £'000 Net cash used in operating activities (385) (141) Cash flows used in investing activities Purchase of plant and machinery (16) (62) Disposal of plant and machinery 3 - Purchase of leasehold improvements - (4) Net cash used in investing activities (13) (66) Cash flow from financing activities Repayment of bank borrowings (17) (16) Other loans 77 50 Shareholder repayments - (25) Interest paid (39) (104) Proceeds of share issue 179 160 Share issue costs (5) (5) Net cash generated from financing activities 195 60 Net decrease in cash and cash equivalents (203) (147) Cash and cash equivalents at beginning of year 4 151 Cash and cash equivalents at end of the year 4 (199) 4 NOTES TO THE FINANCIAL STATEMENTS 1. BASIS OF PREPARATION The financial information set out above does not constitute the Company'sstatutory financial statements for the years ended 31 March 2012 and 31 March2013 within the meaning of section 434 of the Companies Act 2006. Statutoryfinancial statements for the year ended 31 March 2012 have been delivered tothe Registrar of Companies and those for the year ended 31 March 2013 will bedelivered in due course. The auditors have reported on the financial statements for the year ended 31March 2012; their report was unqualified and did not include references to anymatters to which the auditors drew attention by way of emphasis withoutqualifying their report, and did not contain a statement under section 498(2)or (3) of the Companies Act 2006. The auditors have reported on the statutory financial statements for the yearended 31 March 2013; their report was unqualified, and did not includereferences to any matters to which the auditors drew attention by way ofemphasis without qualifying their report, and did not contain a statement undersection 498 (2) or (3) of the Companies Act 2006. The statutory financial statements for the year ended 31 March 2013, from whichthe financial information included in this preliminary announcement isextracted, have been prepared in accordance with International FinancialReporting Standards (IFRS) as adopted by the European Union and as regards theparent company financial statements, as applied in accordance with theprovisions of the Companies Act 2006. Going concern The directors have carefully considered the going concern assumption on thebasis of financial projections and the factors outlined below. The directors have considered financial projections based upon known futureinvoicing, existing contracts, pipeline of new business and the increasingnumber of opportunities it is currently working on, particularly in the retailsector. Subsequent to the year end the Company raised £358,000 before expensesas detailed in the Chairman's Statement. The Company also announced in April2013 that it had won a significant global contract that it expected to deliverrevenues in excess of £1 million over the subsequent 18 months. The Boardbelieves that this contract offers significant future business opportunitiesfor the Company. In addition, these forecasts have been considered in light of the ongoingeconomic difficulties in the UK and global economy, previous experience of themarkets in which the company 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 company will generate sufficient cashresources to meet its liabilities as they fall due over the 12 month periodfrom the date of the approval of the financial statements. The directors have obtained letters of support from shareholders who haveprovided loans to the Group totalling £530,000 at 31 March 2013 (2012: £530,000) stating that they will not call for repayment of the loans within the12 months from the date of approval of these financial statements or, ifearlier, until the Group has sufficient funds to do so. As a result the directors consider that it is appropriate to draw up thefinancial statements on a going concern basis. Accordingly, no adjustments havebeen made to reflect any write downs or provisions that would be necessaryshould the Group prove not to be a going concern, including further provisionsfor impairment to goodwill and investments in Group companies. 2. OPERATING LOSS 2013 2012 £'000 £'000 This is stated after charging/(crediting): Depreciation of owned assets 47 24 Pension contributions 5 5 Operating lease rentals paid: - land and buildings 75 90 - other 17 12 Rentals receivable under operating leases - (2) 3. LOSS PER ORDINARY SHARE 2013 2012 £'000 £'000 Losses Losses for the purposes of basic and diluted earnings 551 424per share being net loss attributable to equityshareholders 2013 2012 Number of shares Number Number Weighted average number of ordinary shares for the 367,675,618 257,898,551purposes of basic earnings per share Number of dilutive shares under option or warrant - - Weighted average number of ordinary shares for the 367,675,618 257,898,551purposes of dilutive loss per share Basic loss per share is calculated by dividing the loss attributed to ordinaryshareholders of £551,000 (2012: £424,000) by the weighted average number ofshares during the year of 367,675,618 (2012: 257,898,551). The diluted loss per share is identical to that used for basic loss per shareas the exercise of warrants and options would have the effect of reducing theloss per share and therefore is not dilutive. Earnings per share has been re-stated for the comparative year to correct atypographical error in the 2012 financial statements. 4. CASH AND CASH EQUIVALENTS The Group The Group The Company The Company 2013 2012 2013 2012 £'000 £'000 £'000 £'000 Cash held at bank 1 88 1 1 Bank overdraft (92) - - - Invoice discounting facility (108) (84) - - (199) 4 1 1 5. POSTING OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS The Report and Financial statements for the year ended 31 March 2013 have beenposted to the shareholders together with a notice convening the Annual GeneralMeeting for 30 September 2013. The Report and Financial statements areavailable on the Company's website: www.mediazest.com Notes to Editors: About MediaZest MediaZest is a creative media agency that specialises in providing innovativeout-of-home marketing solutions to leading retailers, brand owners andcorporations, but also works in the public sector in both the NHS and Educationmarkets. The Group supplies an integrated service from content creation andsystem design to installation, technical support and maintenance. MediaZest wasadmitted to the London Stock Exchange's AIM market in February 2005. For moreinformation, please visit www.mediazest.com.