Half-yearly Report

MEDIAZEST PLC - Half-yearly Report

PR Newswire

London, December 18

Half-yearly unaudited results for the six months ended 30 September 2012

CHAIRMAN'S STATEMENT

Introduction

The results for MediaZest Plc ("MediaZest", the "Company", and collectivelywith the Subsidiary Company Touch Vision Ltd, the "Group") reflect thesix-month period to 30 September 2012 and incorporate the results of its whollyowned subsidiary.

The Company has today announced a placing of 149,166,900 shares at 0.12p pershare to raise £179,000 before expenses.

Financial Review

Revenue for the period was £964,000 (2011 - £1,746,000) and the Group made aloss for the period, after taxation, of £239,000 (2011 - £151,000) afterfinance costs of £55,000 (2011 - £42,000) and having paid administrativeexpenses of £625,000 (2011 - £754,000). Gross margin was £461,000 (2011 - £651,000). The basic and fully diluted loss per share was 0.073 pence (2011 -0.061 pence). The Group had cash in hand of £33,000 (2011 - £139,000) at theperiod end. EBITDA was a loss of £164,000 (2011 - £103,000).

Operational Review

The results for the period reflect a difficult start to the financial year withturnover lower than the corresponding prior period, although an improvement onthe preceding six months. This is partly due to timing issues, as thecorresponding prior period had two larger contracts with total value ofapproximately £550,000 that fell into those months. The Company anticipatesthat revenues will be more evenly spread in the current financial year.

Despite this fall in topline revenue, an ongoing emphasis on margins and sectormix has led to a considerable improvement in gross margin from 37% to 48%. Thisis largely due to the policy of reducing the Group's historical reliance on theEducation sector and to concentrate efforts on enhancing existing anddeveloping new business in the Retail and Corporate sectors.The Board believesthat this is where the MediaZest offering is most effective and theopportunities more attractive.

As noted in the previous year's results, the year began with a difficultquarter. Since then trading has improved considerably and this trend hascontinued. Both sales and pipeline opportunities have grown in the months sinceJuly and the Company has already been awarded significant project business thatis scheduled to be completed in calendar year 2013. This includes a largeproject with revenue in excess of £400,000 along with the achievement of ourfirst significant revenues that have emanated from our growing overseasefforts, in this instance from the United States.

Despite the tough prevailing general economic climate, work in the Retailsector has picked up since the summer, and the Group is pleased to haveprovided a wide range of video wall, digital signage and point of saletechnologies to several new clients in the period as well as continuing to workwith the likes of JD Sports, Kuoni, and Samsung (via agency Cheil).

In October 2012 the Company won its second major industry award, a POPAI (Pointof Purchase Advertising International) silver prize for in-store work with HMV,providing headphone demonstration technologies.

The Group wishes to take advantage of the improvement in trading and growth ofaudio visual in the Retail sector in recent months.Therefore, to assist it inattaining this objective and to provide additional working capital for theGroup, the Company has undertaken a small placing to raise £179,000 of capitalbefore expenses. This is necessary for the continued development of the Group.Directors are aware of the dilutive effect that any placement at the currentshare price has, and have therefore kept the amount of this fundraising to asmodest a level as is feasible.

Outlook

Moving forward, the Board continues to believe that the general economicclimate will remain difficult. Within this context the Board also recognizesthe difficulties inherent in making accurate revenue projections and the timingthereof. Therefore, in the interest of prudence, the Board have taken furthersteps to reduce overheads. In this context, from April 2013, following theexpirationof the lease at the Group's main Farnham office, the Group will moveinto new premises and expects to be able to save significantly on occupancycosts by moving to premises with coststhat are representative of rental marketchanges since the present lease agreement was entered into.

The Group intends to continue to place ongoing and increasing emphasis on theMediaZest Retail and Corporate offerings. It believes that the opportunitiesfor MediaZest's services will continue to grow, notwithstanding the head windof budgetary constraints in the general economic climate. The Group hasexperienced, over the last 12 and in particular six months, an increase inusage of audio visual services in the Retail sector in particular, and thattrend appears set to continue. The Group is in a good position to capitalisefurther on this and continues to pitch for business from substantive parties.As part of this effort, the Group is looking to increase the number of salespeople it employs to both develop and consummate business in such markets.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

Cash and cash equivalents at end of period 4 (147) (75) 4

NOTES TO THE FINANCIAL INFORMATION

1. Basis of preparation

The Group's annual financial statements are prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted for use in the EUapplied in accordance with the provisions of the Companies Act 2006 applicableto companies preparing financial statements under IFRS.

Accordingly, the consolidated half-yearly financial information in this reporthas been prepared using accounting policies consistent with IFRS. IFRS issubject to amendment and interpretation by the International AccountingStandards Board (IASB) and the IFRS Interpretations Committee and there is anongoing process of review and endorsement by the European Commission. Thefinancial information has been prepared on the basis of IFRS that the Directorsexpect to be applicable as at 31 March 2013.

This interim report does not comply with IAS 34 "Interim Financial Reporting"(as adopted by the European Union), as permissible under the AIM Rules forCompanies.

Going Concern

The Directors have considered financial projections based upon known futureinvoicing, existing contracts, pipeline of new business and the number ofopportunities it is currently working on, particularly in the Retail sector. Inaddition, these forecasts have been considered in the light of the ongoingeconomic difficulties in the UK and global economy, previous experience of themarkets 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 resourcesto meet its liabilities as they fall due over the next 12 month period from thedate of this interim announcement.

As a result the Directors consider that it is appropriate to draw up theaccounts on a going concern basis. Accordingly, no adjustments have been madeto reflect any write downs or provisions that would be necessary should theGroup prove not to be a going concern, including further provisions forimpairment to goodwill and investments in Group companies.

Non-statutory accounts

The financial information contained in this document does not constitutestatutory accounts within the meaning of Section 434 of the Companies Act 2006("the Act").

The statutory accounts for the year ended 31 March 2012 have been filed withthe Registrar of Companies. The report of the auditors on those statutoryaccounts was unqualified, did not draw attention to any matters by way ofemphasis and did not contain a statement under Section 498(2) or (3) of theAct. The financial information for the six months ended 30 September 2012 and30 September 2011 is not audited.

2. Loss per share

Basic loss per share is calculated by dividing the loss attributed to ordinaryshareholders of £239,000 (2011 - £151,000) by the weighted average number ofshares during the period of 327,625,327 (2011 - 247,625,327). The diluted lossper share is identical to that used for basic loss per share as the exercise ofwarrants would have the effect of reducing the loss per share and therefore isnot dilutive under International Accounting Standard 33 "Earnings per Share".

3. Cash Generated From/(Used In) Operations

The Group today announces it has completed a fundraising of £179,000 beforeexpenses by way of issuing 149,166,900 ordinary shares. The shares are expectedto be admitted to AIM on 24th December 2012.

6. Distribution of the Half-yearly Report

Copies of the Half-yearly Report will be available to the public fromthe Company website, www.mediazest.com, and from the Company Secretary at theCompany's registered address at 27/28 Eastcastle Street, London, W1W 8DH.

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