Trading Update & Proposed Placing

MediaZestPlc ("MediaZest", the "Company" or "Group"; AIM: MDZ) Trading update and proposed placing MediaZest, the creative digital out-of-home advertising company, is pleased toupdate shareholders on current trading and to elaborate further on itsannouncement dated 10 April 2013. In addition, as a consequence of businessprogress in the financial year ending 31 March 2014 and in order to pay downdebt, the Company is also pleased to announce a proposed placing to raise up to£358,000 before expenses through the issue of up to 143,200,000 shares at 0.25pper share, a premium of 35.1per cent.to the share price at the close ofbusiness on 18 June 2013. Trading Update As announced on 10 April 2013, the Company has won a significant globalcontract that is expected to deliver revenues in excess of £1 million over thenext 18 months. The client, a constituent of the Consumer Staple sector of theS&P 500 index, has contracted with the Company through one of the world'sbiggest advertising agency groups. Given the size and international profile ofthe project, the Company has agreed to maintain ongoing confidentiality untilthe campaign is launched to the public. The Company expects to be able toprovide more information at the time of the launch, later this calendar year.The Board believes this contract offers significant future businessopportunities for the Company. Meaningful revenues have already been booked,and payment received, in respect of work performed by the Company through itsengagement to deliver this project. In respect of other business, the Company announced in its interim reportreleased in December 2012 the award of a large project thatwas anticipated togenerate revenues in excess of £400,000. This was originally scheduled fordelivery in Q3 2012 but is now expected to fall in its entirety into thecurrent financial year (ending 31 March 2014). Both of these substantial contracts give the Company a strong business base forthis financial year. HMV went into in administration in January 2013 and had been a long standingand valued client of the Company for many years. The Board had been monitoringthe Company's financial exposure to HMV for some time and its failure left theCompany with a bad debt of £27,000. However, the Board has worked hard tomaintain good relationships during a difficult period for this client andconsequently the Company is currently receiving ongoing business from the newownership of HMV and hopes to increase this over time, to the extent thatanticipated future revenue should more than cover the aforementioned write-off. From a cost perspective, the Company is no longer tied into an expensive leaseagreement in respect of its Farnham premises. This has enabled it to explorefar more cost effective options which it expects to consummate in the nearfuture. Given the loss of business from HMV in the last quarter of the financial yearended 31 March 2013, and in the context of difficult trading conditions duringthose 12 months, the ancillary costs of financing and lease reparations, theBoard expects those full year results to be similar to those of the prior year. However, the Company has continued to develop and gain business from bothexisting and new clients, in addition to the two large contracts alreadyhighlighted. Clients such as Fiat, JD Sport, Samsung and O2continue to conductmeaningful business with the Company and when the recurring contractualbusiness earned from an array of customers is factored in, the Company hasembarked upon the 2013/14 financial year in a strong commercial position. Proposed placing The Company is pleased to announce that it is proposing to raise up to £358,000before expenses through a conditional placing of up to 143,200,000 new ordinaryshares (the "Placing Shares") with institutional and other investors at a priceof 0.25p per Placing Share (the "Placing Price") (the "Placing"). The PlacingPrice represents a premium of 35.1 per cent. to the closing price on 18 June2013. The Company has received irrevocable commitments from new and existingshareholders to subscribe for 136,800,000 Placing Shares. In addition, it hasreceived expressions of interest to subscribe on the same terms from LanceO'Neill, the Company's Chairman, in respect of a further 2,000,000 PlacingShares and from two directors of the Company's subsidiary company in respect ofan aggregate of a further 4,400,000 Placing Shares. The Placing Shares will represent approximately 23.1 per cent. of the enlargedissued share capital of the Company. Use of proceeds Of the Placing, £50,000 is being raised by way of conversion of loan interestdue to City and Claremont Capital Assets Ltd. The net cash proceeds of thePlacing are expected to amount to approximately £284,000, of which £200,000will be used to pay down a portion of the Company's existing debt (as explainedbelow) in order to reduce the Company's financing costs and to strengthen thebalance sheet. The balance will be applied for working capital purposes. Related party transactions City and Claremont Capital Assets Ltd ("C&C"), a related party by virtue ofbeing a substantial shareholder of the Company as defined in the AIM Rules, issubscribing for 20 million Placing Shares in the Placing through the conversionof £50,000 of the Company's existing loan interest indebtedness to it. Inaddition, the Company will apply £160,000 of the net proceeds of the Placing tofurther reduce its loan principal indebtedness to C&C ("the C&C Transaction"). Lance O'Neill, the Company's Chairman, is one of two directors on the board ofEP&F Capital plc ("EP&F") which is to be repaid £40,000 of the Company'sexisting indebtedness to it fromthe net proceeds of the Placing(the "EP&FTransaction"). EP&F is also deemed to be a related party under the AIM Rules. The C&C Transaction and the EP&F Transaction are deemed to constitute relatedparty transactions under the AIM Rules. The Directors of the Company, otherthan Lance O'Neill in relation to the EP&F Transaction, consider, havingconsulted with Northland Capital Partners Limited, the Company's NominatedAdviser, that the terms of the C&C Transaction and the EP&F Transaction arefair and reasonable so far as the shareholders of the Company are concerned. Notice of General Meeting The Placing is conditional, inter alia, on the approval of the Company'sshareholders and admission of the Placing Shares to trading on AIM. A circularcontaining a notice of the General Meeting is today being sent to the Company'sshareholders with details of the Placing and seeking the approval ofshareholdersfor the issue of the Placing Shares. The General Meeting will beheld at the offices of Nabarro LLP atLacon House, 84 Theobald's Road, LondonWC1X 8RWat10.00am on 5 July 2013. A copy of the circular will be available onthe Company's website: www.mediazest.com The Placing Shares will be issued credited as fully paid and will rankparipassuin all respects with the existing ordinary shares, including the rightto receive all dividends and other distributions declared on or after the dateon which they are issued. Lance O'Neill, MediaZest Chairman, commented: "The Board is pleased with thelevel of commitment exhibited by both current and new investors. The savings onfinancing costs from paying down part of the existing debt will reduce theCompany's cost base as well as strengthen the Company's balance sheet. Thetransformational contract win announced in April will propel the Company intoan exciting growth phase and give the Company a much enhanced internationalprofile." Enquiries: Geoff RobertsonChief Executive OfficerMediaZestPlc 020 7724 5680 Gavin Burnell / Edward HuttonNominated AdviserNorthland Capital Partners Limited 020 7796 8800 Claire Noyce / William LynneBrokerHybridan LLP 020 7947 4350 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