MediaZest losses widen in first half as second lockdown bites

Audio-visual creative company MediaZest reported a 42% fall in revenue in its interim results on Monday, to £0.85m, which it put down to the ongoing impact of the Covid-19 pandemic.

The AIM-traded firm said gross profit was down 38% year-on-year for the six months ended 31 March, to £0.41m, although its gross margin improved to 48% from 45%.

Administrative expenses totalled £0.46m, which was 31% lower than the same period a year earlier.

MediaZest’s first half EBITDA loss widened to £49,000 from £11,000, and its net loss after tax was £0.16m, compared to £43,000 in the prior period.

Basic and fully-diluted losses per share came in at 0.0115p, compared to losses of 0.0031p per share in the first half of the 2020 financial year.

Cash in hand at period end on 31 March totalled £16,000, precisely in line with a year earlier.

On the operational front, MediaZest said the period was adversely affected by lockdowns across the UK in response to the ongoing Covid-19 pandemic, noting that during December and January, a number of clients ceased on-site installation work, with projects only beginning to restart from early February onwards.

That had a negative impact on financial results, particularly in January and February, with the latter month also being affected by the timing of revenue recognition under IFRS 15.

The company said it continued to work with long-term clients including Lululemon Athletica, Pets at Home, Ted Baker and Hyundai during the first half, 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 also went ahead at the beginning of the first half, and again towards the end of the period as lockdown measures eased again.

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, the board said.

“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,” said chairman Lance O’Neill.

“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 2021.

“Recurring revenue streams have been robust throughout the last 18 months and contracts continue to extend and grow in many cases.”

O’Neill said developing those contracts and growing opportunities that focussed on that type of business was a priority, which continued to show success and generate long-term value for 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.”