MediaZest Plc - Unaudited Interim Results

28 June 2021

MediaZest Plc

("MediaZest", the "Company” or “Group"; AIM: MDZ)

Unaudited Interim Results for the six months ended 31 March 2021

MediaZest, the creative audio-visual company, announces its unaudited interim results for the six months ended 31 March 2021 (the “Period”).

MediaZest’s interim results are set out below, with comparisons to the same period in the previous year as well as to MediaZest’s audited results for the 18 month period ended 30 September 2020.

CHAIRMAN’S STATEMENT

Introduction

The Board presents the consolidated unaudited results for the six months ended 31 March 2021 for MediaZest plc and its wholly owned subsidiary company MediaZest International Ltd (together the “Group”).

Financial Review

• Revenue for the Period was £846,000, down 42% (2020: £1,454,000) due to the impact of Covid-19.
• Gross profit was down 38% accordingly to £410,000 (2020: £656,000).
• Gross margin rose to 48% (2020: 45%).
• Administrative expenses were £459,000, a reduction of 31% (2020: £667,000).
• EBITDA was a loss of £49,000 (2020: £11,000).
• Net loss for the period after taxation was £160,000 (2020: £43,000).
• The basic and fully diluted loss per share was 0.0115 pence (2020: loss per share 0.0031 pence).
• Cash in hand at 31 March 2021 was £16,000 (2020: £16,000).

Operational Review

As highlighted in the Financial Review above, the unaudited financial results for the six months to 31 March 2021 were adversely affected by nationwide UK “lockdowns” in response to the ongoing Covid-19 pandemic (the “Pandemic”), by way of comparison with the prior period.

However, since the end of the Period, business has improved significantly and the Group is extremely busy pitching and delivering projects for a wide range of both existing and new clients.

During December 2020 and January 2021 many clients ceased on-site installation work, with projects only beginning to recommence from early February 2021 onwards. This had a negative impact on financial results, particularly in January and February of 2021, the latter also impacted by the timing of revenue recognition under IFRS 15.

As noted in recent announcements, since the beginning of the calendar year the Group has seen a significant increase in new opportunities and in committed projects. The timing of these projects themselves and recognition of the resultant revenue to the Group (in accordance with accounting standards), has resulted in the benefit of these new business wins being recognised in the second half of the financial year rather than during the Period.

In light of the Pandemic, the Group continued to work hard to keep costs low during the 6 months and utilised the Government Job Retention Scheme appropriately during the Period.

Additional financing was not required and in the post balance sheet period the Group has been able to repay some shareholder debt using free cashflow from trading.

Client Work in the Period

The Group continued to work with long term clients such as Lululemon Athletica, Pets at Home, Ted Baker, and Hyundai during the Period, with new project installations as well as ongoing service and maintenance contractual work.

New store installations for Dermologica, Samsung and a number of digital kiosk projects did also go ahead at the beginning of these 6 months, and again towards the end of the Period as lockdown measures eased once more.

A number of new clients were added during the Period with smaller initial projects but the potential to grow into more significant engagements in the future.

Significant wins being delivered Post Period included the Vashi Covent Garden project, announced recently on 18 June and forthcoming new projects with Hyundai and Samsung.

Gross margins continued to hold up well reflecting the strong balance towards the Group’s high-quality managed service offering.

Outlook

It remains difficult to assess the extent to which the Pandemic will affect the Group’s forthcoming trading and financial performance as the situation continues to evolve rapidly with the final stage of  ‘unlocking’, which was scheduled for 21 June, being deferred to 19 July in the light of recent data.

However, the number of new projects currently underway or already completed in the second half of the year has been encouraging and the Board is looking for the Group to deliver a much improved second half of Financial Year 21.

Recurring revenue streams have been robust throughout the last 18 months and contracts continue to extend and grow in many cases. Developing these contracts and growing opportunities that focus on this type of business has been a priority in recent years and continues to show success and generate long term value in the Group.

Performance of the Group over the second six months and into the next financial year looks encouraging, subject to the uncertainty within which many businesses are currently operating.

The Board continues to work on the assumption that the disruption caused by the Pandemic will have an impact throughout 2021 and continues to plan accordingly, searching for new revenue streams whilst managing costs tightly.

Lance O’Neill

Chairman

28 June 2021