25 March 2019
MediaZest plc
(“MediaZest”, the “Company” or
“Group”, AIM:MDZ)
Trading Update
MediaZest, the AIM quoted creative audio-visual company, is
pleased to provide shareholders with an update on current
trading.
Trading Performance in Current Year
and New Business Developments
Since announcing its interim results on 5
November 2018, the Company has continued to make progress
against a difficult economic backdrop. As such, the Board expects
the full year results for the year ended 31
March 2019 to be below current market expectations, despite
showing an improvement compared to the prior year.
Several clients are delaying projects and investment decisions,
particularly in the retail sector, the result of which is that the
Group’s trading results for the second half of the financial year
(6 months to 31 March 2019) are
expected to be lower than the first half of the year. As a result,
MediaZest is now expecting to be profitable at Group level EBITDA
and to make a small loss after tax at year end, notwithstanding the
strong first 8 months of the year.
Despite the challenging macroeconomic and political headwinds,
the Company’s strategic targeting of longer-term projects with roll
out potential and ongoing managed service revenues continues to
generate returns. Since the beginning of 2019, the Group has won
four significant new projects and work on two of these projects has
already commenced. The third is a large project for an UK
University which is expected to be delivered during late summer
2019. The fourth opportunity is an ongoing project which has
already generated some revenues in February and March 2019, but which is expected to grow
substantially over the coming years. The total combined revenue
value of these projects is in excess of £500,000.
MediaZest International, the Group’s wholly owned operational
company, continues to grow. It is expected to deliver revenues in
excess of £3 million for the year to 31
March 2019 and profit after tax of approximately £250,000,
compared to £95,000 in the previous year.
The Group has prioritised entering into new recurring revenue
contracts over the last few years. If projects are delayed the
presence of this ongoing revenue stream is important and the Board
calculates that annualised recurring revenues are currently worth
approximately £700,000 per annum (2017: approximately £600,000).
Despite the progress compared to the prior year, delays and
cancellations to projects for the aforementioned reasons will
result in the Company falling short of the target figure of
£800,000 which was announced on 5 November
2018.
Following the collapse into administration of HMV, a
long-standing client, the Company has made a bad debt provision of
£16,000 against outstanding invoices representing amounts due no
more than 30 days at the time of administration. The Group has
continued to work with the new owners of HMV and expects to
generate additional revenues from this relationship.
Balance Sheet and Income Statement
The Company raised £110,000 (before expenses) from existing
investors in February 2019 via the
placing of 110,000,000 new ordinary shares at a placing price of
0.1p per share. This placing has strengthened the Group’s balance
sheet and has also provided the Group with additional working
capital.
In addition, the Board has moved to cut costs of approximately
£200,000 per annum from overheads, the impact of which will begin
to be realised from March 2019
onwards.
Outlook
The Company’s new business efforts have delivered progress
compared to the prior year and the Board is confident that this,
combined with recurring revenue contracts, will provide the Group
with a base for further growth in the next twelve months.
The Company’s Board look forward to providing shareholders with
further updates as appropriate.
This announcement contains inside
information for the purposes of Article 7 of Regulation (EU)
596/2014.
Enquiries: |
|
Geoff Robertson
Chief Executive Officer
MediaZest Plc |
0845 207 9378 |
David Hignell/Lindsay Mair
Nominated Adviser
SP Angel Corporate Finance LLP |
020 3470 0470 |
Claire Noyce
Broker
Hybridan LLP |
020 3764 2341 |
Notes to Editors:
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 .