31st Mar 2010 07:00
31 March 2010 MediaZest Plc ("MediaZest" or the "Group") Unaudited results for the six months ended 31 December 2009 CHAIRMAN'S STATEMENTIntroductionOn 12 February 2010, the Board of MediaZest announced that it had raised £324,000 to fund both the Company's working capital requirements and tocontribute towards restructuring its capital base. Consequently, given both thelevel of funds raised and the timing thereof, the Board decided to extend thecurrent accounting period to 15 months, ending 31 March 2010. This was toenable the Company to present audited accounts that better reflect the currentposition and its improvement since the last reporting period.The Company, therefore, as a consequence of this change in the year end from 31December 2009 to 31 March 2010, reports this second set of interim results, tocover the six months to 31 December 2009. The audited results for the 15 monthperiod to 31 March 2010 must be published by 30 September 2010 but the Boardexpects to be in a position to finalise and announce these earlier.
Financial Review
Revenue for the period fell sharply as a result of the recession, to £1,263,000(2008 - £2,279,000) and the Group made a loss for the period, after taxation,of £141,000 (2008 - £263,000) after finance costs of £9,000 (2008 - nil) andhaving paid administrative expenses of £689,000 including £124,000 ofrestructuring costs (2008 - £1,104,000 including nil restructuring costs). Thebasic and fully diluted loss per share was nil pence (2008 - 1 pence). TheGroup had cash in hand of £1,000 (2008 - £102,000) at the period end. EBITDAexcluding restructuring costs was £17,000 (2008 - loss of £241,000).At the period end, the Group had received £154,000 of the £324,000 announced on12 February 2010. The balance of £170,000 was received subsequent to the periodend. This fundraising was in addition to the £200,000 raised in August 2009.Only the funds received by 31 December 2009 are reflected in these accounts.
Operational Review
As noted in the interim results to 30 June 2009, after encouraging and improving performances during 2007 and 2008, the global recession has had a significant impact on the Group's 2009 trading activities. In light of this, the Board responded during the first half of 2009 by implementing a further restructuring of the Group's cost base. Additional emphasis was placed upon generating ongoing contractual revenues in order to build a more robust business that could progress during the recession and deliver growth as the economy improves.
The bulk of this restructuring was undertaken in the second quarter 2009 withthe effect being realised during the second half of that year. The second halfof 2009 also showed an increase in revenue, consistent with the seasonality ofTouchVision's Education business, which is considerably busier in the Summerdue to the holiday period when students are not in attendance. The combinedresult was to enable the Group to deliver a profitable EBITDA, excludingrestructuring costs, for the six months to 31 December 2009. There is stillsome way to go to achieve the results of which we believe the Group is capable,but the Board is pleased to have reached this milestone in such a difficulteconomic environment.There has been evidence of a contraction in expenditure in the public sectormarkets in which TouchVision operates. Despite this, it won two significantUniversity installation jobs of approximately £200,000 each, both delivered toa very high standard. The balance of the Company's customer base has continuedto engage with TouchVision to deliver their audio-visual teaching solutions,albeit in some cases with the restriction of reduced budgets.The client base of MediaZest Ventures, predominantly high street retailers suchas JD Sports and O2, continued to grow with new clients acquired and existingclients re-engaging. However, overall revenue was considerably less than theprevious year. The Board believes that this was a direct result of thereduction in client marketing budgets as a consequence of recessionarypressures. This view is reinforced by the high client retention rate thatMediaZest Ventures enjoyed. Therefore, despite expanding the client base, thelevel of revenue per client decreased. The Board expects this to improve as theoverall economy begins to emerge from recession.
Outlook
January to March is historically the Group's weakest quarter of the year due tothe seasonality of the markets in which it operates. High street retailbusiness is quiet post Christmas, and Education is similarly quiet with nomajor Educational holiday periods (Easter falling into April for 2010).Revenues to date are broadly in line with the corresponding period last yearand combined with the reduced cost base, this has resulted in a noticeableimprovement in the Group's performance compared to the same period last yearand in previous years. The Group is continuing its strategy of prioritisingongoing contractual revenues whereby the medium term objective is to cover 100%of overheads through this type of business.With regard to the future, MediaZest Ventures continues to market itself on thebasis that its unique positioning and profile will present enhanced businessopportunities as the economic climate improves. It is noticeable that since thebeginning of 2010, enquiries have increased significantly and its client basecontinues to grow. Amongst the household names with which MediaZest Ventures isengaged are the likes of Barclays Bank, Dr Martens, Famous Grouse, Fiat,Microsoft, McDonald's, Nike and Philip Morris.The sales cycle for MediaZest Ventures business can be several months and sothe Board expects the outcome of the current increase in enquiries to have aneffect during the second half of 2010.The TouchVision business is also experiencing an increase in both enquiries andactivity, particularly in the Education sector as well as in generalinstallation work. Again, this activity is from a mix of both existingcustomers who are aware of the strength of our offering in a very competitivemarket, and new customers searching for better value in difficult times.Since July 2009 we have improved the Group's balance sheet significantly,having injected considerable equity capital as well as paying down orrefinancing debt and our credit facilities. The Group overhead base has beenmarkedly reduced and the business restructured to address the challenges thathave been presented to it. Notwithstanding, the general business environmentremains difficult and any small business' access to both credit and financingis challenging. The Board's objective is for the Group to achieve sustainableprofitability. It aims to achieve this by continuing to build upon the progressthat has been made since last year and to take whatever initiatives it deemsnecessary to achieve this goal.Lance O'Neill 30 March 2010Chairman
For further information please contact:
Geoff Robertson, MediaZestTel: 020 7724 5680Antony Legge, Nominated AdviserAstaire Securities LimitedTel: 020 7448 4400 www.mediazest.comCONSOLIDATED INCOME STATEMENT
for the six months ending 31 December 2009
Unaudited Unaudited Audited Six Six Twelve months to months to months to Notes 31-Dec-09 31-Dec-08 31-Dec-08 £'000 £'000 £'000 Continuing Operations Revenue 1,263 2,279 4,424 Cost of sales (706) (1,438) (2,846) Gross profit 557 841 1,578 Administrative expenses : other (540) (1,082) (2,129) Administrative expenses : (124) - -restructuring costs EBITDA (107) (241) (551) Administrative expenses: (25) (22) (47)depreciation Operating loss (132) (263) (598) Interest (9) - (7) Loss before taxation (141) (263) (605) Taxation - - - Loss on ordinary activities after (141) (263) (605)taxation Loss per ordinary share Basic 2 £0.00 £0.01 £0.03 Diluted 2 £0.00 £0.01 £0.03CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2009 Unaudited Unaudited Audited as at as at as at 31-Dec-09 31-Dec-08 31-Dec-08 £'000 £'000 £'000 Non-current assets Goodwill 2,772 2,772 2,772 Plant and equipment 55 87 87 Total non-current assets 2,827 2,859 2,859 Current assets Inventories 186 107 107 Trade and other receivables 269 617 617 Cash and cash equivalents 1 102 102 Total current assets 456 826 826 Current liabilities Financial liabilities - borrowings (125) (220) (220) Bank overdraft (83) - - Trade and other payables (591) (835) (835) Current tax liabilities (121) (110) (110) Total current liabilities (920) (1,165) (1,165) Net current assets / (liabilities) (464) (339) (339) Net assets 2,363 2,520 2,520 Equity Share Capital 2,362 2,283 2,283 Share premium account 3,327 3,211 3,211 Shares to be Issued 154 - - Other reserves 7 7 7 Retained earnings (3,487) (2,981) (2,981) Total equity 2,363 2,520 2,520CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the 6 months ended 31 December 2009
Share Share Shares Share Retained Total to be Options Capital Premium Issued Reserves Earnings Equity £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2008 2,283 3,211 - 7 (2,718) 2,783 Total comprehensive income for - - - - (263) (263)the period Balance at 31 December 2008 2,283 3,211 - 7 (2,981) 2,520 Balance at 1 July 2008 2,283 3,211 - 7 (2,718) 2,783 Total comprehensive income for - - - - (633) (633)the period Balance at 30 June 2009 2,283 3,211 7 (3,351) 2,150 Total comprehensive income for - - - - (141) (141)the period Expensing of old capital - (5) - - 5 0
raising cost to Share Premium
Amounts received in advance of - - 154 - -
154share issue Issue of shares 79 121 - - - 200 Balance at 31 December 2009 2,362 3,327 154 7 (3,487) 2,363CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 31 December 2009
Unaudited Unaudited Audited Six Six Twelve months to months to months to Note 31-Dec-09 31-Dec-08 31-Dec-08 £'000 £'000 £'000 Net cash used in operating activities 3 (327) 130 (118) Investing activities
Purchase of property, plant and (10) (25)
(27)equipment
Proceeds from disposal of property, - -
-plant and equipment
Net cash generated from / (used in) (10) (25)
(27)investing activities Financing activities
Debt financing - invoice discounting net (59) (70)
220drawdown / (repayment) Share issue proceeds 200 - -
Amounts received in advance of share 154 -
-issue Interest paid (9) - (7)
Net cash generated from / (used in) 286 (70)
213financing activities
Net increase / (decrease) in cash and (51) 35
68cash equivalents
Cash and cash equivalents at beginning (31) 67
34of period
Cash and cash equivalents at end of (82) 102
102period
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 Acts applicable tocompanies 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 International Financial ReportingInterpretations Committee (IFRIC) and there is an ongoing process of review andendorsement by the European Commission. The financial information has beenprepared on the basis of IFRS that the Directors expect to be applicable as at31 December 2009.The financial information has been prepared under the historical costconvention as modified by the revaluation of available-for-sale investments.The principal accounting policies set out below have been consistently appliedto all periods presented.
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.
The Directors have considered financial projections based upon known futureinvoicing, existing contracts, pipeline of new business, and previousexperience in the various markets in which it operates, in addition tofundraising activity and the Group's debt based facilities. These forecastshave been considered in light of the global recession and the significant costrestructuring that was undertaken in the final quarter of 2008 and in 2009 as aresponse to these conditions. The financial projections indicate that thecompany will generate sufficient cash resources to meet its liabilities as theyfall due over the 12 month period from the date of this interim announcement.
As a result the directors consider that it is appropriate to draw up the accounts 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.
Non-statutory accounts
The financial information for the 6 months ended 31 December 2009 and 31December 2008, and the year ended 31 December 2008 do not comprise statutoryaccounts within the meaning of section 434 of the Companies Act 2006. Statutoryaccounts for the year ended 31 December 2008, were prepared under IFRS, andhave been delivered to the Registrar of Companies. The auditors reported onthose accounts; their report was unqualified but did contain references togoing concern to which the auditors drew attention by way of an emphasis ofmatter paragraph without qualifying their report and did not contain anystatement under section 498 of the Companies Act 2006.
2. Loss per share
Basic loss per share is calculated by dividing the loss attributed to ordinaryshareholders of £141,000 (2008 £263,000) by the weighted average number ofshares during the period of 133,825,327 (2008 - 22,825,327). 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
Unaudited Unaudited Audited Six months Six months Twelve months to to to 31-Dec-09 31-Dec-08 31-Dec-08 £'000 £'000 £'000 Operating loss (132) (263) (598) Share option charge - - -
Depreciation of tangible assets 25 22
47 Decrease/(increase) in stock (9) 203 65
Increase/(decrease) in creditors (265) (253)
(67)
Decrease/(increase) in debtors 54 421
435
Cash generated from / (used in) (327) 130 (118)operations Tax paid - - - (327) 130 (118)
4. Distribution of the Half-yearly Report
Copies of the Half-yearly Report will be available to the public from the Company website, www.mediazest.com, and from the Company Secretary at the Company's registered address at 3rd Floor, 16 Dover Street, London W1S 4LR.
vendorRelated Shares:
Mediazest