8 June 2020
MediaZest Plc
("MediaZest", the "Company” or the
“Group”; AIM: MDZ)
Updated Trading
Performance and Covid-19 update
The Board provides the following update on trading for the six
months to 31 March 2020 and updates
shareholders on the current position of the Group in the context of
the Covid-19 pandemic (the “Pandemic”).
- Group revenue £1,454,000, EBITDA profit of £57,000 and a loss
after tax of £50,000 for the 6 months to 31
March 2020 despite negative impact of the Pandemic
- Net assets of £1,629,000 as of 31 March
2020
- New recurring revenue contracts in excess of £150,000 written
since “lockdown” begun
- Secured additional funding of £50,000 from Bounce Back Loan in
May 2020
Trading for the 6 months ended
31 March 2020
As announced on 3 April 2020, 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.
Within that announcement the Board committed to provide
shareholders and other stakeholders with information regarding
financial performance for the 6-month period ending 31 March 2020, albeit not in audited statutory
account format.
For the 6 months to 31 March 2020,
Group revenue was £1,454,000 leading to a profitable EBITDA of
£57,000 and a loss after tax of £50,000. Net assets were £1,629,000
and the Groups cash balance as at 31 March
2020 was £16,000.
The Group’s cash balance on 31 May
2020 was £55,000. The Group is currently considering both
its short- and medium-term funding options as a result of the
Pandemic.
The impact of the Pandemic was particularly pronounced on the
Group’s financial results for March
2020 as projects had been put on hold due to the “lockdown”.
The Group estimates that the adverse impact on the business within
the 6 months was to reduce revenue by approximately £200,000 and
profit by £80,000.
These figures reflect the improvement in trading and business
performance between September 2019
and the onset of the Pandemic, as previously noted. This was
largely a result of the development of several key projects and new
opportunities from a range of clients across the Retail, Education
and Corporate sectors. Several involved long term roll out
opportunities which the Group has begun delivering and expects to
continue as the “lockdown” restrictions in various countries are
lifted.
Trading post the impact of the
Pandemic
During the “lockdown” period in the UK, all Group deployments
and installations have been on hold, and the ability of the Group
to generate project-based revenue during this period has thus been
restricted. However contractual revenues based around the Group’s
service, maintenance, data, and content management offerings have
been robust and delivered most of the turnover during the
period.
A handful of clients continued to keep stores open being in
‘critical industries’ throughout the “lockdown” period. Strictly
following the latest Government guidelines including social
distancing rules, the Group has continued to support these clients
on an ongoing basis; often using advanced remote management tools
to quickly assist clients. These clients have been able to use
digital signage installed by the Group to communicate quickly and
effectively with their customers to improve safety and
introduce/react to new rules as they evolve.
The Group is pleased to now note that as the lockdown has been
eased across many countries, further client sites have re-opened
and in May 2020 MediaZest delivered
on two of the previously delayed projects. There are several other
projects now similarly scheduled for completion in June 2020 and the Board expects that all
previously delayed projects will be delivered in the coming
weeks.
In addition to these existing projects which are now at the
completion stage, the Group has been involved in active discussions
in relation to potential new client mandates over the last month,
and several are expected to be won during the next 4-6 weeks.
Contractual recurring revenue streams continue to be robust and
the Group recently renewed a key long-term contract until
October 2022 (with a clause to extend
for a further 12 months) plus a significant annual contract with
another client in May 2020. The
combined value of these over the initial contractual periods is
approximately £150,000 rising to up to £220,000 if extension
clauses are activated.
Response to the Pandemic
At this time, it remains difficult to fully assess the extent to
which the Pandemic will affect forthcoming trading and financial
performance as the situation is evolving rapidly. April and May
trading were adversely impacted but it is expected that the
operating subsidiary, MediaZest International Limited, broke even
for May 2020.
The Board is still working on the assumption that the disruption
caused by the Pandemic will have an impact for a minimum of six
months and continues to plan accordingly as best it can.
As previously announced, cost savings of approximately £150,000
had been identified and executed at the beginning of April, and in
the intervening period the Group has secured further savings of
£20,000 in addition to this amount.
The Group continues to utilise the Government’s Job Retention
Scheme to furlough certain employees and secured a Bounce Back Loan
under the Government’s scheme of £50,000 in May 2020 to provide additional cash resources
during the “lockdown”.
New technology and products
As well as reducing costs, the Group has been investigating
several new lines of business, all associated with the audio-visual
market, aimed at meeting client’s changing needs after the
Pandemic.
This includes research and development around motion sensing
technology and haptic technology. With the latter, the Group has
been working to incorporate new emerging tools that allow it to
create experiences for clients which simulate touch in mid-air -
without physically having to touch the object. Examples include the
vibration felt in a mobile phone, but there are also wide-ranging
applications in terms of customer experience that the Group is
working to develop.
Initial reaction from potential customers for these two product
lines has been encouraging.
In addition, the Group’s management team has used the time to
further develop the data tracking options provided to customers and
improve the delivery mechanism of these in order to allow for
easier analysis and to create greater value for clients. The Group
uses a range of tools such as touch screens, push buttons and
footfall counters to provide data that can be used to measure
return on investment of digital signage implementations and most
importantly to help refine content and messaging to maximise impact
for our clients. This includes triggering specific content at
different times of day, based on different weather or different
audiences, for example. In the coming months, as businesses emerge
from the Pandemic into a “new normal”, it is the Board’s belief
that being able to actively demonstrate return on investment will
be key to returning to and continuing the growth achieved prior to
the Pandemic.
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/Soltan Tagiev
Nominated Adviser
SP Angel Corporate Finance LLP |
020 3470 0470 |
Claire Noyce
Broker
Hybridan LLP |
020 3764 2341 |
|
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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