MediaZest Plc. (MDZ.L) updated shareholders on current trading and to elaborate further on its announcement dated 10 April 2013. In addition, as a consequence of business progress in the financial year ending 31 March 2014 and in order to pay down debt, the Company also announced a proposed placing to raise up to 358,000 pounds before expenses through the issue of up to 143.20 million shares at 0.25 pence per share, a premium of 35.1per cent to the share price at the close of business on 18 June 2013.
As announced on 10 April 2013, the company said it has won a significant global contract that is expected to deliver revenues in excess of 1 million pounds over the next 18 months.
The company announced in its interim report released in December 2012 the award of a large project that was anticipated to generate revenues in excess of 400,000 pounds. This was originally scheduled for delivery in third-quarter of 2012 but is now expected to fall in its entirety into the current financial year (ending 31 March 2014).
The company said, from a cost perspective, it is no longer tied into an expensive lease agreement in respect of its Farnham premises. This has enabled it to explore far more cost effective options which it expects to consummate in the near future.
"Given the loss of business from HMV in the last quarter of the financial year bended 31 March 2013, and in the context of difficult trading conditions during those 12 months, the ancillary costs of financing and lease reparations, the Board expects those full year results to be similar to those of the prior year," The company said.
The company noted that it has continued to develop and gain business from both existing and new clients, in addition to the two large contracts already highlighted. Clients such as Fiat, JD Sport, Samsung and O2continue to conduct meaningful business with the Company and when the recurring contractual business earned from an array of customers is factored in, the Company has embarked upon the 2013/14 financial year in a strong commercial position.
The company announced that it is proposing to raise up to 358,000 pounds before expenses through a conditional placing of up to 143.20 million new ordinary shares with institutional and other investors at a price of 0.25 pence per Placing Share . The Placing Price represents a premium of 35.1 per cent. to the closing price on 18 June 2013. The company has received irrevocable commitments from new and existing shareholders to subscribe for 136.80 million Placing Shares.
In addition, it has received expressions of interest to subscribe on the same terms from Lance O'Neill, the Company's Chairman, in respect of a further 2 million Placing Shares and from two directors of the Company's subsidiary company in respect of an aggregate of a further 4.40 million Placing Shares.
The Placing Shares will represent about 23.1 per cent of the enlarged issued share capital of the Company.
Of the Placing, 50,000 pounds is being raised by way of conversion of loan interest due to City and Claremont Capital Assets Ltd. The net cash proceeds of the Placing are expected to amount to approximately 284,000 pounds, of which 200,000 pounds will be used to pay down a portion of the Company's existing debt) in order to reduce the Company's financing costs and to strengthen the balance sheet. The balance will be applied for working capital purposes, the company said.
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