MediaZest confident despite impact of second England lockdown
Audio-visual creative company MediaZest updated the market on its current trading on Thursday, and the impact of the second England lockdown as a result of the Covid-19 coronavirus pandemic.
The AIM-traded firm said that, after the initial UK lockdown, trading had continued to be “encouraging”.
It said that, although client work continued at a slower pace than in the run-up to March, new projects were being pitched for on a regular basis, with several mandates won in recent weeks.
Ongoing contractual income remained “robust”, the board said, and the renewal rate of such recurring revenue streams had been “strong”.
The differing terms of the second lockdown meant that many projects were still being delivered, with additional safety and social distancing measures.
In light of that, the board said it did not expect the impact of the second lockdown to be as negative as the first, although it could have an adverse effect on trading.
The group said it would also continue to use government support schemes as appropriate where work could not continue, and cost reduction measures remained in place where possible to mitigate the impact of such restrictions.
Ongoing roll-out projects had restarted, and were continuing during November and beyond, the board said.
Supplemental to that flow of work, both existing and potential new clients were starting to look at new longer-term programmes, with MediaZest currently pitching for several of those which, if won, would fall in 2021 and beyond.
MediaZest said its strategy continued to be to grow the recurring revenue streams and regular project workflows to generate consistent group profitability, with tight cost control during the “difficult” period.
Those regular incomes were supplemented with larger-scale projects, which could add “significant growth” to the company, according to the directors.
“We are encouraged by the robustness of project work at this current time given the circumstances, but remain mindful of the challenges ahead. We believe that in the medium term the core markets in which the company operates - retail, automotive and corporate - will all show accelerated adoption of digital signage and audio-visual solutions as a by-product of the pandemic,” said chief executive officer Geoff Robertson.
“We look forward to providing shareholders with a further update before the end of the calendar year.”
As it had previously announced, MediaZest extended its most recent accounting year to become an 18-month period to 30 September.
The financial results for the period, including the adoption of the new IFRS 16 and recognition of the placement of new convertible loan notes in August and the associated additional liquidity, were currently being prepared.
MediaZest’s board said it expected to provide some guidance on the results before the end of 2020, with the release of full audited accounts and details of the next MediaZest annual general meeting in early 2021.
At 1142 GMT, shares in MediaZest were up 4.71% at 0.04p.