MDZ Mediazest Plc

 
TIDMMDZ 
 
3 April 2020 
 
                                 MediaZest Plc 
                   ("MediaZest" or the "Company"; AIM: MDZ) 
 
                          Trading and Covid-19 update 
 
The Board provides the following update on trading for the second half of the 
Group's financial year to 31 March 2020 and also updates shareholders on the 
impact on the Group of and subsequent response to, the Covid-19 outbreak. 
 
Due to the significant impact of Covid-19 on trading from February onwards, 
this trading update is split to more clearly reflect financial performance. 
 
Trading prior to Covid-19 impact 
 
In the period from October 2019 to January 2020, the business performed well 
and trading was much improved from the first half of the financial year. 
 
For these four months alone, revenue was GBP1.2 million and profit at the 
operating subsidiary MediaZest International was GBP167,000 at EBITDA level, 
generating a net profit of GBP127,000 after tax. 
 
At consolidated level, revenue was GBP1.2 million with EBITDA profit of GBP58,000 
and a small loss after tax of GBP5,000. 
 
This progress was driven by the completion of a large project for University of 
Central Birmingham, the delivery of nine new Pets at Home store projects and 
other work for ongoing clients including Lululemon Athletica, Tiffany & Co., 
HMV and Kuoni. The Group was pleased to see that in March 2020 Pets at Home won 
the coveted Store of the Year award at the Retail Week Awards for their 
refurbished Stockport store, for which the Company provided the audio-visual 
solutions. 
 
Trading post Covid-19 impact 
 
Results for February and particularly March 2020 have been materially adversely 
impacted by the Covid-19 outbreak, as clients initially began to defer some 
projects and more recently temporarily close stores and other places of 
business. 
 
Whilst the UK and certain other countries remain in "lockdown", all deployments 
and installations in progress are currently on hold until further notice.  In 
particular this has affected key projects across the UK and in Milan, 
Copenhagen and Berlin, all of which are now expected to complete later in 2020. 
 
Several of these projects were scheduled to fall in February or March 2020 and 
would have contributed to the ongoing improving performance across the second 
half of the year to 31 March 2020. Due to the disruption caused by Covid-19, 
the Board expects revenue for these two months to be lower than forecast and 
reduced to approximately GBP300,000 in aggregate (comparable period last year GBP 
319,000), with a modest net profit at operational level and a subsequent small 
loss at consolidated Group level. 
 
In light of this, rather than the anticipated profit for the 6 months to 31 
March 2020 the Group now expects to realise a modest loss after tax (6 months 
ended 31 March 2019 loss of GBP201,000) albeit with a profitable EBITDA for the 
period (6 months ended 31 March 2019 loss of GBP144,000). Within this the Group's 
operating subsidiary MediaZest International is still expected to be profitable 
for the 12-month period. 
 
Some recurring revenue streams have been affected by store closures, although 
three of the Company's clients are keeping stores open at this current time 
being deemed as selling essential goods. The Group is continuing to provide 
support and maintenance services to these businesses remotely and in accordance 
with the latest Government recommendations and guidelines. 
 
Outlook and Covid-19 Response 
 
At this time, it is not possible to assess the extent to which Covid-19 will 
affect forthcoming trading and financial performance and the situation is 
evolving rapidly. Further updates will be provided as soon as more information 
is known. 
 
The Board is working on the assumption that the "lockdown" period and ongoing 
disruption caused by Covid-19 will have an impact for a minimum of six months 
and is therefore planning accordingly as best it can. 
 
It is expected that once a more normal business environment resumes, projects 
that have been delayed from February, March, April and possibly beyond, will be 
required to be completed and as such there will be an initial period post 
restrictions when the Company will be extremely busy. 
 
Beyond that, there are several ongoing roll-out programmes for clients with 
which the Group is engaged. These are currently on hold but also believed 
likely to resume promptly once the current restrictions on movement and store 
openings are lifted. 
 
Accordingly, for this period of disruption, the Company has implemented a range 
of cost cutting measures to help secure the long term future of the Group, 
whilst keeping the hard working and high quality delivery teams that have been 
built over recent years intact where possible. 
 
The Group has therefore utilised the Government's Job Retention Scheme to 
furlough certain employees and is in discussions with its banks and larger 
shareholders regarding other measures. 
 
In addition, approximately GBP150,000 of cost savings have been identified and 
executed already with further reductions under consideration should they be 
necessary. 
 
Furthermore, the Board has agreed to extend the current accounting period to 30 
September 2020 in order to defer audit costs until later in the year so that 
cash can be conserved during the current "lockdown" period. 
 
It is the Group's intention to announce information regarding financial 
performance for the 6-month period ending 31 March 2020 as soon as practical in 
the coming weeks in order to provide shareholders and other stakeholders with 
suitable financial detail, albeit not in audited statutory account format. 
 
This announcement contains inside information for the purposes of Article 7 of 
Regulation (EU) 596/2014. 
 
Enquiries: 
 
Geoff Robertson                                      0845 207 9378 
Chief Executive Officer 
MediaZest Plc 
 
David Hignell/Soltan Tagiev                          020 3470 0470 
Nominated Adviser 
SP Angel Corporate Finance LLP 
 
Claire Noyce                                         020 3764 2341 
Broker 
Hybridan LLP 
 
 
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 
 
 
 
END 
 

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April 03, 2020 02:00 ET (06:00 GMT)

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