2 March 2022
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, which was incorporated into
UK law by the European Union (Withdrawal)
Act 2018, until the release of this announcement.
MediaZest Plc
("MediaZest" or the "Company”; AIM: MDZ)
Final Results for
the Year ended 30 September 2021
MediaZest, the creative audio-visual
company, is pleased to provide shareholders with final results for
the year ended 30 September 2021.
CHAIRMAN’S
STATEMENT
Introduction
The Board presents the consolidated
audited results for the year ended 30
September 2021 for MediaZest plc ("MDZ") and its wholly
owned subsidiary company MediaZest International Ltd ("MDZI") which
together constitute the "Group".
MDZ Group Results
for the year and Key Performance Indicators ("KPIs")
- Revenue for the year
was £2,246,000 (18 months to 30 September
2020: £3,068,000).
- Gross profit was
£1,075,000 (18 months to 30 September
2020: 1,524,000).
- Gross margin was 48%
(18 months to 30 September 2020:
50%).
- Administrative expenses
excluding depreciation and amortisation were £997,000 (18 months to
30 September 2020: £1,735,000).
- Depreciation and
amortisation costs were £74,000 (18 months to 30 September 2020: £124,000).
- EBITDA profit of
£78,000 (18 months to 30 September
2020: loss of £186,000).
- Net loss for the year
after taxation was £140,000 (18 months to 30
September 2020: loss of £448,000).
- The basic and fully
diluted loss per share was 0.0101
pence (2020 loss per share: 0.0324
pence).
- Cash in hand at
30 September 2021 was £120,000 (2020:
£91,000).
MDZ Group
Summary
The Group’s financial results for
the year ended 30 September 2021 were
affected substantially by the Covid- 19 pandemic (the "Pandemic")
in the first half of the year, with a significant reduction in
revenue particularly during the UK lockdown between December 2020 and late February/March 2021.
In response, the Board reduced costs
wherever possible without compromising the long-term goals of the
business.
In the second half of the year,
following the lifting of lockdown restrictions, financial
performance improved considerably and the Group performed
creditably, recovering to a net EBITDA profit after tax for the
full year of £78,000 (18 months to 30
September 2020 loss of £186,000) and a much reduced loss
after tax of £140,000 (prior period loss of £448,000).
In the second half of the year on
its own, the Group recorded EBITDA profit of £127,000 and profit
after tax of £20,000.
The client base has remained
consistent during the year, and although during lockdown project
revenues decreased in the first six months, they were generally
only delayed. Many of those projects were successfully delivered in
the second half of the year, despite some supply chain
challenges.
The performance of the Group’s
recurring revenue streams, which have remained high, has been
particularly pleasing. Despite some obvious reductions associated
with closed or temporarily closed stores, overall recurring
revenues have grown during the year and post year end. The Group
has worked closely with clients to successfully sign several
longer-term deals giving surety of revenues over a longer period
(typically three years).
The Group’s operating subsidiary,
MDZI, continues to develop - successfully building value and
demonstrating consistent profitability. MDZI delivered EBITDA
profit of some £330,000 and a profit after tax of £206,000 for the
full year.
The Group continues to operate in
three core sectors:
Retail - Digital transformation
continues as retailers deploy digital signage displays including
window displays, self-service kiosks and large scale displays such
as LED and videowalls.
Automotive - As this sector evolves
rapidly the role of technology in the showroom journey increases.
As a result many of the audio-visual solutions deployed in general
Retail are being seen in these markets.
Corporate Offices - typical projects
in this sector include hybrid meeting rooms, video conferencing
technology and innovation centres - all of which are undergoing
radical transformation that in many cases has been accelerated by
the additional demands that the Pandemic has put upon office
building technology.
As expected demand in all three
continues to grow and enquiries are increasing in each of them as
audio- visual technology plays a greater role in day to day
operations.
Group
Strategy
The Board's strategy continues to be
one of growing both the quantum and quality of revenues with an
emphasis upon clients where there is a long-term opportunity to
deploy solutions across multiple sites and, sometimes countries,
over a period of time. Whilst the majority of business is UK based,
the Group services clients on both a pan-European and Global basis
and expects opportunities for both to continue. As such management
has worked to forge new supplier and partner relationships to
easier deliver those services in the wake of travel disruption due
to the Pandemic and the impact of Brexit.
The Group’s focus is on providing a
high-quality Managed Service offering wrapped around hardware and
software delivery that generates ongoing contractual revenues from
the customer base over several years. Supply chain issues, felt
across many industries have enabled the Group to add further value
in the consultation and specification areas of client work as
businesses look to rebound from the Pandemic.
In the longer-term, the aim is to
cover the Group's costs with recurring contractual revenues to
achieve consistent profitability, supplemented by one or more 'game
changing' large scale roll-out projects.
With the negative financial impact
of the Pandemic being felt particularly acutely in the first half
of the year, the Board continued to mitigate the effects by keeping
a tight control over costs in areas where variable costs could best
be flexed. Government schemes such as the Job Retention Scheme were
also used where appropriate to partially fund employee costs during
furlough periods.
Due to the improved performance in
the financial year, further fundraising efforts were not
necessary.
MDZ Group
Operational Review
As noted, the twelve-month period
fell into two distinct phases:
The first six months trading
reflected the impact of the Pandemic and slow down in activity as a
result of UK lockdowns particularly between December 2020 and February/March 2021. Many clients delayed investment
decisions or project delivery, instead choosing to wait for the
situation to improve.
Revenues were £846,000 leading to an
EBIDTA loss of £49,000 and loss after tax of £160,000. January and
February 2021 were particularly
challenging.
The Board closely monitored all
costs to mitigate the impact of the slowdown and utilised
government support schemes as appropriate. As trading in the months
preceding this period had improved, the Group was able to continue
until the lockdown eased without the need to raise additional
financing.
The majority of revenue generated
was understandably dominated by existing clients continuing ongoing
committed long-term projects including Lululemon Athletica, Pets at
Home, Ted Baker and Hyundai.
Recurring revenue contracts with these clients and others continued
to provide a steady source of income during this challenging
time.
Several new clients were added
during the period, however most of these projects were small albeit
with the potential to grow into more significant engagements in the
future.
Second half of the year
As noted above, the second six
months, post lockdown, proved far more profitable for the Group
with revenues of £1,400,000, EBITDA of £127,000 and Profit after
tax of £20,000.
Key new client projects in the
period included deployment of interactive touchscreens for Hyundai
to aid customer understanding of their Electric Vehicle offerings;
a tranche of additional Pets at Home stores across the UK and new
client Vashi, for whom the Group delivered audio-visual solutions
at their Covent Garden flagship store. The latter featured what at
the time included the largest European Retail deployment of
Samsung's "The Wall" Business MicroLED product as part of a double
height, floor to ceiling interactive installation which received
notable comment across the globe.
Long standing retail clients such as
Lululemon Athletica continued to roll out digital signage in
European stores and the Group was pleased to work with Ted Baker on the deployment of a high brightness
window screen network in their stores. As the benefits of digital
'posters' in window become ever clearer, especially with the
ability to adjust safety messaging as the Pandemic developed,
demand for this type of installation has increased. The Group have
worked for several years developing skills to measure return on
investment of such installations as a differentiator in the market
when it comes to recommending and evaluating solutions for clients
as part of the consultative sales process.
Once again the Group was delighted
to work with Rockar, this time on their new Jaguar Land Rover store
in London's Canary Wharf.
Away from the world of Retail and
Automotive Retail, management focussed on Corporate Offices with
new projects for a division of AXA, and notably for logistics
company Wincanton, for whom it helped deliver a state- of-the-art
Innovation Centre to celebrate their ongoing commitment to
developing technology in their business.
The Board believes the role of the
office environment will change significantly in the coming years.
Audio- visual technology will have an increasing role to play
whether to manage 'hot desking', book meeting rooms, provide high
quality audio and video for hybrid meetings or bring the 'wow
factor' to innovation spaces. As such a new role was created to
lead efforts in this market, and the Group is actively recruiting
for this role as it expands the sales team.
The Group is also developing an
interesting new area of expertise, assisting digital artists with
procurement of technology as NFTs (Non-fungible tokens using
Blockchain technology) develop rapidly across the world.
Outlook from
October 2021 into 2022
At this time, it still remains
difficult to fully assess the extent to which the Pandemic will
affect the Group's forthcoming trading and financial performance as
the situation continues to evolve. However since the lifting of the
most recent lockdown measures in the first quarter of 2022,
business has markedly improved. The Omicron Covid-19 variant does
not appear to have significantly changed that and performance
during the first quarter of the new financial year (October 2021 to December
2021) has been encouraging, with November 2021 a particularly good month for
profitability.
January typically begins slowly,
however in 2022 the Company has pitched for a number of potential
projects, and it is the Board's view that this will continue
through the current financial year as businesses seek to rebound
from the Pandemic.
Ongoing long term project roll outs
with customers including Hyundai, Pets at Home, Lululemon and HMV
have continued into 2022 with further installations planned or
underway.
The Group continues to add new
recurring revenue contracts and seek to extend larger contracts in
multi-year deals which has successfully improved revenues under
contract during the previous financial year. The goal remains to
cover a more significant element of the ongoing cost base with
these revenues as the business continues to grow.
With the improvement in performance
seen over the last nine months and growth in profitability of MDZI,
the Board considers it an opportune time to seek to utilise the AIM
listing and grow the Group by acquisition, as well as
organically.
As such several potential
acquisition targets have been evaluated and this remains an ongoing
process. At such a time as the Board is able to identify a suitable
business combination which it believes will add significant value
to shareholders, it will recommend such a proposal. Whilst these
discussions have been positive to date, there can be no guarantees
that they will lead to a value accretive transaction or
transactions for MediaZest.
With the hard-won gains of recent
years, even in the face of the Pandemic and associated lockdowns,
the Board remains positive about the Group’s future growth
potential.
Lance
O'Neill
Chairman
CONSOLIDATED
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED
30 SEPTEMBER 2021
|
|
|
|
Year
Ended 30.9.21 |
Period 1.4.19 to 30.9.20 |
|
£'000 |
£'000 |
Continuing
operations |
|
|
Revenue |
2,246 |
3,068 |
|
|
|
Cost of sales |
(1,171) |
(1,544) |
|
|
|
Gross
profit |
1,075 |
1,524 |
|
|
|
Other operating
income |
- |
25 |
Administrative
expenses – excluding depreciation & amortisation |
(997) |
(1,735) |
|
|
|
EBITDA |
78 |
(186) |
|
|
|
Administrative
expenses – depreciation & amortisation |
(74) |
(124) |
|
|
|
Operating
profit/(loss) |
4 |
(310) |
|
|
|
Finance costs |
(144) |
(168) |
|
|
|
Loss on ordinary
activities before taxation |
(140) |
(478) |
|
|
|
Income tax |
- |
30 |
|
|
|
Loss for the
year |
(140) |
(448) |
Loss
attributable to:
Owners of the parent |
(140) |
(448) |
|
|
|
Loss per ordinary
0.1p share |
|
|
Basic |
(0.0101) |
(0.0324) |
Diluted |
(0.0101) |
(0.0324) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
30 SEPTEMBER
2021
|
|
2021 |
2020 |
|
|
£'000 |
£'000 |
Non-current assets |
|
|
|
Goodwill |
|
2,772 |
2,772 |
Owned |
|
|
|
Intangible assets |
|
- |
- |
Property, plant and equipment |
|
18 |
39 |
Right of use |
|
|
|
Property, plant and equipment |
|
127 |
171 |
Total Non-current assets |
|
2,917 |
2,982 |
|
|
|
|
Current assets |
|
|
|
Inventories |
|
150 |
93 |
Trade and other receivables |
|
414 |
493 |
Cash and cash equivalents |
|
120 |
91 |
Total current assets |
|
684 |
677 |
|
|
|
|
TOTAL ASSETS |
|
3,601 |
3,659 |
|
|
|
|
Equity |
|
|
|
Called up share capital |
|
3,656 |
3,656 |
Share premium |
|
5,244 |
5,244 |
Share option reserve |
|
146 |
146 |
Retained earnings |
|
(7,817) |
(7,677) |
Total equity |
|
1,229 |
1,369 |
|
|
|
|
Non-current liabilities |
|
|
|
Financial liabilities – borrowings |
|
|
|
Interest bearing lease liabilities |
|
164 |
157 |
Other interest bearing loans and
borrowings |
|
108 |
176 |
Total Non-current liabilities |
|
272 |
333 |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
1,114 |
968 |
Financial liabilities – borrowings |
|
|
|
Invoice discounting facility |
|
192 |
245 |
Interest bearing lease liabilities |
|
56 |
59 |
Other interest bearing loans and
borrowings |
|
738 |
685 |
Total current liabilities |
|
2,100 |
1,957 |
|
|
|
|
Total liabilities |
|
2,372 |
2,290 |
|
|
|
|
Total equity and liabilities |
|
3,601 |
3,659 |
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
|
Called up
share |
Retained |
Share |
Share
Option |
Total |
|
capital |
Earnings |
Premium |
Reserve |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Balance at 1 April
2019 |
3,656 |
(7,229) |
5,244 |
146 |
1,817 |
|
|
|
|
|
|
Changes in
equity |
|
|
|
|
|
Total comprehensive
loss |
- |
(448) |
- |
- |
(448) |
|
|
|
|
|
|
Balance at 30
September 2020 |
3,656 |
(7,677) |
5,244 |
146 |
1,369 |
|
|
|
|
|
|
Changes in
equity |
|
|
|
|
|
Total comprehensive
loss |
- |
(140) |
- |
- |
(140) |
|
|
|
|
|
|
Balance at 30
September 2021 |
3,656 |
(7,817) |
5,244 |
146 |
1,229 |
CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
|
Year
Ended 30.9.21 |
(Restated)Period 1.4.19 to 30.9.20 |
|
£'000 |
£'000 |
|
|
|
Cash flows from
operating activities |
|
|
Cash generated from
/(absorbed by) operations |
246 |
(73) |
Tax received |
- |
30 |
Net cash from
operating activities |
246 |
(43) |
|
|
|
Cash flows from
investing activities |
|
|
Purchase of tangible
fixed assets |
(8) |
(29) |
Net cash used in
investing activities |
(8) |
(29) |
|
|
|
Cash flow from
financing activities |
|
|
Other loans
repayments |
(10) |
(16) |
Shareholder loan
receipts |
- |
718 |
Shareholder loan
repayments |
(30) |
(515) |
Bounce back loan
(repayments)/receipts |
(3) |
50 |
Invoice financing
(repayments)/receipts |
(53) |
42 |
Payment of lease
liabilities |
(42) |
(47) |
Interest paid |
(71) |
(93) |
Net cash generated
from/(used in) financing activities |
(209) |
139 |
|
|
|
Increase in cash
and cash equivalents |
29 |
67 |
|
|
|
Cash and cash
equivalents at beginning of year |
91 |
24 |
|
|
|
Cash and cash
equivalents at end of the year |
120 |
91 |
NOTES TO THE FINANCIAL STATEMENTS
The financial information set out in
this preliminary announcement does not constitute statutory
accounts as defined in section 435 of the Companies Act 2006.
The financial information for the
period ended 30 September 2020 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors
reported on those accounts; their report was (i)
unqualified, (ii) did include a reference to which the auditor drew
attention by way of emphasis without qualifying their report in
respect of going concern and (iii) did not contain a statement
under section 498(2) or 498(3) of the Companies Act 2006.
The statutory accounts for the year
ended 30 September 2021 have not yet
been delivered to the Registrar of Companies. The auditors reported
on those accounts; their report was (i) unqualified, (ii) did not
include a reference to which the auditor drew attention by way of
emphasis without qualifying their report in respect of going
concern and (iii) did not contain a statement under section 498(2)
or 498(3) of the Companies Act 2006.
The 2021 accounts will be delivered
to the Registrar of Companies following the Company's Annual
General Meeting.
GOING CONCERN
The Group made a loss after tax of
£140,000 (2020: loss of £448,000) and has net current liabilities
of £1,416,000 (2020: £1,280,000). The financial statements are
prepared on a going concern basis which the Directors believe to be
appropriate for the following reasons:
The Directors have carefully
considered the going concern assumption on the basis of financial
projections and the factors outlined below.
The Directors have considered
financial projections based upon known future invoicing, existing
contracts, pipeline of new business and the increasing number of
opportunities it is currently working on in 2022, across all main
sectors the company specialises in. Several substantial new
contracts have been won during the new financial year, ongoing roll
out projects with existing clients continue apace, and recurring
revenues remain robust. Future operating and capital costs have
also been reviewed and included in the cash flow forecast prepared
by the Directors.
These forecasts have also been
considered in light of the ongoing economic difficulties in the
global economy as a result of the Covid-19 Pandemic and
consequences of the UK Brexit agreement, previous experience of the
markets in which the company operates and the seasonal nature of
those markets.
Management has engaged with clients
where possible to understand their plans for the coming year and
the likely timing of those plans. Several have indicated
substantial projects which they expect to work with the Group to
deliver in the next 12 months. Visibility on the timings associated
with those projects is improved in the current financial year as
restrictions associated with the Pandemic are lifted and many
clients return to more normal working patterns and practices.
These forecasts indicate that the
Group will generate sufficient cash resources to meet its
liabilities as they fall due over the 12-month period from the date
of the approval of the accounts.
The Directors have obtained letters
of support from two shareholders who have provided material loans
to the Group, stating that they will not call for repayment of the
loan within the 12 months from the date of approval of these
financial statements or, if earlier, until the Group has sufficient
funds to do so. The balance of these loans at 30 September 2021 totalled £652,000 (2020:
£589,000).
As a result the Directors consider
that it is appropriate to draw up the accounts on a going concern
basis. The financial statements do not include any adjustments that
would result from the basis of preparation being inappropriate.
Whilst the financial information
included in this announcement has been computed in accordance with
International Financial Reporting Standards (IFRS), this
announcement does not in itself contain sufficient information to
comply with IFRS. The accounting policies used in preparation of
this announcement are consistent with those in the full financial
statements that have yet to be published.
The Report and
Consolidated Financial Statements for the year ended 30 September 2021 will be posted to shareholders
shortly and will also be available to download from the Company's
website: www.mediazest.com
1.
SEGMENTAL
INFORMATION
Revenue for the year can be analysed by customer location as
follows:
|
|
|
|
|
|
Year
Ended 30.9.21 |
Period
1.4.19 to 30.9.20 |
|
|
£’000 |
£’000 |
UK and Channel
Islands |
|
2,178 |
2,669 |
Rest of Europe |
|
66 |
374 |
North America |
|
2 |
25 |
|
|
2,246 |
3,068 |
An analysis of revenue by type is shown below:
|
|
|
|
Year Ended 30.9.21 |
Period
1.4.19 to 30.9.20 |
|
£’000 |
£’000 |
Hardware
and installation |
1,714 |
2,097 |
Support
and maintenance – recurring revenue |
477 |
832 |
Other
services (including software solutions) |
55 |
139 |
|
2,246 |
3,068 |
|
|
|
|
Segmental information and results
The Chief Operating Decision Maker
('CODM'), who is responsible for the allocation of resources and
assessing performance of the operating segments, has been
identified as the Board. IFRS 8 requires operating segments to be
identified on the basis of internal reports that are regularly
reviewed by the Board. The Board have reviewed segmental
information and concluded that there is only one operating
segment.
The Group does not rely on any
individual client - the following revenues arose from sales to the
Group's largest client.
|
Year
Ended 30.9.21 |
Period
1.4.19 to 30.9.20 |
|
£’000 |
£’000 |
|
|
|
Goods and
services |
228 |
433 |
Service and
maintenance |
131 |
53 |
|
359 |
486 |
2.
EARNINGS/(LOSS) PER
ORDINARY SHARE
|
Year Ended
30.9.21 |
Period 1.4.19 to
30.9.20 |
Profit/(Loss) |
£’000 |
£’000 |
Profit/(Loss) for the purposes of
basic and diluted earnings per share being net loss attributable to
equity shareholders |
(140) |
(448) |
|
|
|
|
2021 |
2020 |
Number of shares |
Number |
Number |
Weighted average number of ordinary
shares for the purposes of basic earnings per share |
1,396,425,774 |
1,396,425,774 |
|
|
|
Number of dilutive shares under
option or warrant |
- |
- |
|
2021 |
2020 |
|
£’000 |
£’000 |
Weighted average number of ordinary
shares for the purposes of dilutive loss per share |
1,396,425,774 |
1,396,425,774 |
Basic earnings per share is
calculated by dividing the loss after tax attributed to ordinary
shareholders of £140,000 (2020: £448,000) by the weighted average
number of shares during the year of 1,396,425,774 (2020:
1,396,425,774).
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 AND CASH
EQUIVALENTS
Following a review of recent IFRIC
decisions the status of the invoice discounting facility was
reviewed and it was determined that it should be reflected in
financing activities rather than as a component of cash and cash
equivalents.
|
The
Group |
The
Group |
|
2021 |
2020 |
|
£’000 |
£'000 |
Cash held at bank |
120 |
91 |
|
120 |
91 |
Enquiries: |
|
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 |
|
|
About MediaZest
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