Mediazest Regulatory News (MDZ)

29 Sep 2006 07:02

MediaZest plc29 September 2006 MediaZest Plc Interim results for the six months ended 30 June 2006 CHAIRMAN'S STATEMENT Introduction The results for MediaZest Plc ("MediaZest", the "Company", and collectively withthe Subsidiary Companies, the "Group") reflect the six-month period to 30 June2006. They incorporate the results of its subsidiaries, all of which are whollyowned. Results for the Period Turnover for the period was £1,325,000 (2005 - £30,000) and the Group made aloss for the period, after taxation, of £520,000 (2005 - £305,000) after payinginterest of £2,000 (2005 - net interest received £23,000) and having paidadministrative expenses of £1,028,000 (2005 - £334,000). Administrative expensesincluded £56,000 of exceptional restructuring costs. The basic and fully dilutedloss per share was 2 pence (2005 - 3 pence). The Group had net cash balances of£800,000 (2005 - £1,105,000) at the period end. Overview The Group has made progress in both operational subsidiaries, MediaZest VenturesLimited ("MediaZest Ventures") and Touch Vision Limited ("Touch Vision"),although the first half of the year resulted in a loss. An element of this wasexpected due to traditional seasonality within the business, and in the case ofMediaZest Ventures, difficult trading conditions in the retail sector. At thestart of 2006, we implemented a programme of cost containment measures includinga restructuring of the Board of Directors in order to give the business a moreappropriate cost base going forward. MediaZest Ventures During the first half of 2006, MediaZest Ventures has continued to build on itsrelationships with both media agencies and brand owners. Our work with existingcustomers such as Motorola and Chivas continues and we have had success with newclients such as Candy & Candy, Boots, Nokia, Edeus, Luminar, Sony Ericsson,Proctor & Gamble, O2, Adidas, and Shell providing innovative displays for theirstores and promotions. We had an enthusiastic response to our stand at the In-Store Show in Earls Courtduring June 2006 displaying a substantial range of our innovative products to awide variety of retailers, brand owners and agency creative personnel. As aresult of this and increasing acceptance of creative digital media as part ofthe marketing mix, we are experiencing greater levels of business referrals fromthe media agencies. We believe this is indicative of a growth in this excitingnew market, although the pace of that growth is slower than previouslyanticipated. The company is in continuing discussions with several major UK retailers andbrand owners regarding long term projects across their retail estates on thebasis of the success of earlier work. We are working with several of ourcustomers regarding the supply of our products for the Christmas 2006 salescampaigns and beyond. Touch Vision Progress at Touch Vision has been better. Year on year profitability andturnover have both improved as we head into what will be the busiest period ofthe year. After a loss in 2005, we would anticipate that 2006 will showimprovement, and an encouraging turnaround in performance in the first year ofour ownership. Having won the tender of a three-year framework agreement for the provision ofsales, installation, and maintenance of audiovisual equipment to London SouthBank University and London Metropolitan University in the second quarter of theyear, the Education Division has shown noticeably stronger results in 2006. TheJuly to September quarter is traditionally our busiest in this market, and 2006has been no different. As the Christmas period approaches, orders across our retail clients such as HMVand the Co-Operative Group have increased. In the Corporate sector, the Companyhas been awarded two significant orders commencing in the second half of thefinancial year to December 2006 - providing audiovisual solutions for the new UKheadquarters of both Electronic Arts, a major international computer gamesmanufacturer and Dunnhumby, a leading database manager and analytical servicesprovider. Licences and agreements We continue to add new, exclusive agreements to our portfolio, providing us witha competitive advantage. Of particular note are Interactive Floor Media,Shelf-Edge TV, and EPOP Display Systems, which have generated interest amongstour customers since we introduced them into our offering at the In-Store Showin June. Outlook Although the results for this period have been disappointing, we believe theactions we have taken to position the business going forward in terms of costbase, and the pipeline of well developed opportunities that currently exist,leave the business with a more positive outlook for the remainder of 2006. Sean ReelChairman29th September 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited Half Year Half Year Year Ended Notes 30-Jun-06 30-Jun-05 31-Dec-05 £'000 £'000 £'000 Turnover 1,325 30 877 Cost of sales (815) (24) (486) Gross profit 510 6 391 Administrative expenses (including (1,028) (334) (1,234)exceptional item of £56,000 for half yearended 30 June 2006) Operating Loss (518) (328) (843) Net interest (payable)/receivable (2) 23 (4) Loss on ordinary activities before taxation (520) (305) (847) Tax on loss on ordinary activities - - - Retained loss on ordinary activities after (520) (305) (847)taxation Loss per ordinary 10p share Basic 3 £0.02 £0.03 £0.06 Diluted 3 £0.02 £0.03 £0.06 There are no recognized gains or losses during the current and preceding periodsother than the loss for the periods. CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited Half Year Half Year Year Ended 30-Jun-06 30-Jun-05 31-Dec-05 £'000 £'000 £'000Fixed Assets Intangible Fixed Assets 2,699 115 2,772Tangible Assets 91 8 128 Current assets Stock 219 89 169Debtors 999 137 745Cash at bank (before overdrafts) 963 1,105 1,377 2,181 1,332 2,291 Creditors: Amounts falling due within one (887) (133) (587)year Net current (liabilities)/assets 1,294 1,199 1,704 Total assets less current liabilities 4,084 1,321 4,604 Capital and reservesCalled up share capital 2,283 1,371 2,283Share premium account 3,211 299 3,211Profit and loss account (1,410) (348) (890) Equity shareholders' funds 4,084 1,321 4,604 CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Audited Half Year Half Year Year Ended Note 30-Jun-06 30-Jun-05 31-Dec-05 £'000 £'000 £'000Net cash outflow from operating activities 4 (402) (440) (1,368) Returns on investments and servicing offinanceInterest paid or received (2) 23 (4)Net cash inflow/(outflow) from returns on (2) 23 (4)investmentsinvestments and servicing of finance TaxationCorporation tax paid - - - Capital expenditure and financialinvestmentsPurchase of tangible fixed assets (10) (9) (35) Net cash outflow from capital expenditure (10) (9) (35)andfinancial investments AcquisitionsNet cash acquired with subsidiary - - 147undertakingAcquisition of subsidiary undertaking - - (970)Net cash outflow for acquisition - - (823) FinancingIssue of ordinary share capital net of costs - 1,003 2,952 - 1,003 2,952 Increase/(decrease) in cash in the period (414) 577 722 NOTES 1. Basis of preparation The interim report for the six month period to 30 June 2006 is unaudited anddoes not constitute statutory accounts within the meaning of section 240 of theCompanies Act 1985. It has been prepared under the historical cost conventionand on a basis consistent with the accounting policies for the year ended 31December 2005. The financial information relating to the year ended 31 December 2005 has beenextracted from the statutory accounts, which have been filed with the Registrarof Companies. The auditors report on those financial statements were unqualifiedand did not contain a statement under section 237(2) of the Companies Act 1985. 2. Taxation No charge for corporation tax for the period has been made due to the expectedtax losses available. 3. Loss per share Basic loss per share is calculated by dividing the loss attributed to ordinaryshareholders of £520,000 (2005 - £847,000) by the weighted average number ofshares during the period of 22,825,327 (2005 - 14,721,499). The diluted loss pershare 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 Financial Reporting Standard 22 "Earnings per Share". 4. Reconciliation of Operating Loss to Net Cash Outflow from Operating Activities Unaudited Unaudited Audited Half Year Half Year Year Ended 30-Jun-06 30-Jun-05 31-Dec-05 £'000 £'000 £'000 Operating loss (518) (328) (843)Depreciation of tangible assets 47 2 32Amortisation of goodwill 73 - 42Decrease/(increase) in stock (50) (89) (63)Increase/(decrease) in creditors 300 93 (311)Decrease/(increase) in debtors (254) (118) (225) Net cash outflow from operating activities (402) (440) (1,368) Enquiries: Sean Reel, Chairman & CEO, MediaZest Plc 020 7724 5680Geoff Robertson, Group Finance Director, MediaZest Plc 020 7258 9646Liam Murray, City Financial Associates Limited 020 7090 7800 This information is provided by RNS The company news service from the London Stock Exchange