TIDMZIN

RNS Number : 7196N

Zinc Media Group PLC

27 September 2023

27 September 2023

Zinc Media Group plc

("Zinc Media", the "Group" or the "Company")

Interim results for the six months ended 30 June 2023

Zinc Media Group plc (AIM: ZIN) , the award-winning television, brand and audio production group, is pleased to announce its unaudited interim results for the six months to 30 June 2023 ("H1 2023").

Headlines

The Group is pleased to report excellent progress in H1 2023 and continues to trade in line with market expectations for the current financial year. The first half of 2023 includes the following highlights:

   --      Revenue of GBP18.1m (H1 2022: GBP10.8m), an increase of 68% year-on-year. 

o Organic revenue growth (i.e. all businesses excluding The Edge) of 12% and a strong customer base providing continuing high net revenue retention

o Growth in both TV and Content Production revenue

o The Edge continues to perform ahead of acquisition expectations

-- Adjusted EBITDA(1) profit of GBP0.2m compared to an Adjusted EBITDA profit of GBP0.1m in the whole prior financial year (H1 2022: loss of GBP0.6m).

   --      Gross margins in the period were significantly up at 41% (H1 2022: 33%). 

-- Cash of GBP5.8m at 30 June 2023 is GBP2.2m higher than at 31 December 2022 due to working capital inflows.

-- As at 25 September 2023, total revenue won and expected to be recognised in FY23 is GBP35m. This is an increase of GBP4m since the last trading update in July 2023 and an improvement of GBP8m compared to the same point in 2022 in relation to that financial year.

-- With GBP35m of revenue already won and expected to be recognised this year, revenue for the whole year will significantly exceed the GBP30m of revenue generated in FY22.

-- The Group's pipeline remains strong with a further GBP7m of revenue that can be recognised in FY23 in highly advanced discussions.

-- Loss before tax in the period of GBP1.6m (H1 2022: GBP1.8m) is mainly driven by costs relating to the acquisition of The Edge (revaluation of deferred consideration due to The Edge's strong performance, amortisation, unwinding of discounted deferred consideration), depreciation and finance costs resulting from The Edge being in the Group this period, plus depreciation and finance costs.

Operational Highlights

-- The Group was awarded "Production Company of the Year" at the prestigious New York Festival Film and Television Awards.

-- The Group produced a number of highly acclaimed documentaries that led the news agenda and got the nation talking including:

o Making global headlines with the documentary Putin vs The West, which was one of the most watched programmes on BBC iPlayer.

o Bowelbabe: In Her Own Words for the BBC, which details the extraordinary last five years of cancer campaigner Dame Deborah James' life, received national press coverage, was on the front page of the Radio Times and has been nominated for a Grierson award.

o Gender Wars , exploring the issue of transgender women's rights, was made for Channel 4 as part of its remit to make agenda setting programmes which tackle contentious issues.

-- The Group won its largest ever television commission in a two-year deal worth over GBP7m. The commission is from Channel 5 for 136 hours of the hit show Bargain Loving Brits.

-- The Group produced its biggest ever digital branded content commission Big in America with Alex Polizzi. It was commissioned by the Department for Business & Trade and is being broadcast on LinkedIn.

-- The Group has partnered with Idris Elba to produce Paid in Full: The Battle for Payback (working title) for broadcasters CBC (Canadian Broadcasting Corporation) and the BBC, examining the systematic exploitation of black artists by the music industry.

-- The Group's television label Atomic Television, only launched in January 2023, won its first commission with a substantial contract worth over GBP1m for an international blue-chip broadcaster.

Outlook

-- The recent period of new business conversion underpins the Board's confidence in meeting market expectations for the financial year, including substantially increased Adjusted EBITDA profitability in the second half of the year.

-- The Edge is performing ahead of acquisition expectations and its integration is progressing well: cross-divisional business development opportunities have been identified and the co-location with Zinc's other London businesses is complete which will enable cost savings and further synergies.

-- The Group has a strong pipeline of potential new business for 2024 and has GBP11m of revenue already won and expected to be recognised in FY24. This is GBP5m ahead of revenue won at the same point last year for recognition in the following year.

Mark Browning, Chief Executive, commented: "We are delighted with our H1 performance in a challenging content production market. Our year-on-year increase of this scale bucks the market trend. This is the result of a robust strategy rooted in organic growth alongside the acquisition of The Edge. The investments made in the transformation plan are delivering, every business in the Group is growing and we are confident of meeting market expectations for the year."

A copy of the interim results will be made available on the Company's website , zincmedia.com.

([1]) Adjusted EBITDA is defined as EBITDA before Adjusting Items comprising share based payment charges, profit/loss on disposal of fixed assets, reorganisation and restructuring costs, acquisition costs and change in fair value of contingent consideration

For further information, please contact:

Zinc Media Group plc +44 (0) 20 7878 2311

Mark Browning, CEO / Will Sawyer, CFO

www.zincmedia.com

Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 20 7496 3000

James Moat / George Tzimas / Alex Emslie

IFC Advisory Ltd (Financial PR) +44 (0) 20 3934 6630

Graham Herring / Zach Cohen

CHAIRMAN'S STATEMENT

We are delighted to report a strong set of H1 results. Content production is typically weighted to H2 so for the Group to report a small profit at Adjusted EBITDA level, while maintaining investment for the longer term, is outstanding. It is worth putting this performance in context. These H1 results are better than the full year results in 2021. This is the scale of growth we are reporting.

In our interim results 12 months ago we said we were looking forward to sustained profitability in 2023 and we are achieving this. With a positive Adjusted EBITDA in H1, we are confident of at least delivering in line with market expectations for the full year, which in turn will be Zinc's strongest financial performance for many years.

This is a company transformed under this management team. They came to Zinc with a track record of turning around underperforming media companies and the results for Zinc are excellent. This turnaround is all the more impressive given the run of poor market conditions which included Brexit, Covid, the cost-of-living crisis and economic downturn impacting on commissioning budgets.

Having invested over the past three years in starting new businesses to increase our addressable market, we are pleased to report that both TV and Content Production are increasing their revenue which is outstanding in this tough market. This year more of the businesses are positively contributing at Adjusted EBITDA level, which is demonstrated in the excellent Adjusted EBITDA year on year performance. Some remain earlier in their investment phase and therefore do not yet contribute positively to the Group's profit but they are of strategic importance and we expect them to do so in time as we continue to invest in their growth. Operating profit is now in sight and with it sustained cash generation.

Creatively, H1 has also seen Zinc at the top of its game with our content leading the national conversation with the likes of Gender Wars for Channel 4, Bowelbabe: In her own words which told the story of Dame Deborah James, Blackadder: The Lost Episode and Putin vs The West for the BBC. In production we have Paid in Full: The Battle for Payback (working title) in partnership with Idris Elba, The Grand Tour with Rob Rinder and Rylan Clarke and Legends of Comedy with Lenny Henry. Much of the content produced by The Edge and Zinc Communicate is confidential to those clients we work with, but no less impressive.

Notwithstanding inflationary pressures, the tough content commissioning market and the macro issues affecting the UK public markets, the future of Zinc Media Group is looking brighter than ever. The Group is on course for a period of steady organic growth and sustainable profitability, with the Board focused on providing value to shareholders.

The Board would like to thank the management team, employees and freelancers for their professional and dedicated work, and our shareholders for their continued support.

Christopher Satterthwaite

Chairman

CEO'S REPORT

CURRENT TRADING, STRATEGY AND MARKET OUTLOOK

Trading in the first six months of the year has been excellent with organic revenues increasing 12% to GBP12.1m (H1 2022: GBP10.8m), pushing total H1 revenue to GBP18.1m including The Edge, which was acquired in H2 2022. This excellent performance sees the Group report Adjusted EBITDA profit of GBP0.2m compared to a H1 2022 loss of GBP0.6m. For further context the H1 2021 loss was GBP1.1m, which demonstrates the transformation within the Group.

Despite significant market headwinds in the UK, the FY23 position remains strong with total revenue won and expected to be recognised in this financial year of GBP35m (as at 25th September). This is an increase of GBP4m since the last trading update in July 2023 and an improvement of GBP8m compared to the same point in 2022 in relation to that financial year. This figure already exceeds the GBP30m of revenue generated in the whole of FY22 and with GBP7m of revenue at a highly advanced stage we expect further revenue to be won and recognised this year.

The content commissioning market remains poor, particularly within the UK, but the Group is trading strongly with GBP11m of revenue already won and expected to be recognised in FY24, and this is supported by a healthy pipeline. For context, at this point in 2022 there was GBP6m booked for FY23.

These financial results demonstrate the effectiveness of the transformation plan enacted in 2019. Our strategy is anchored in investment in organic growth, supplemented by strategic acquisitions, with the aim of delivering a profitable and cash generative content creation group of significant scale listed on the UK public market. Despite unprecedented headwinds caused by Brexit, Covid and more recently inflation and the cost-of-living crisis, the Group is delivering to plan and trading in line with market expectations.

Zinc Media Group now comprises 12 businesses, of which 8 are new since 2020. All are united by a reputation as a trusted partner delivering the highest quality content to our range of international and blue-chip clients in either television production or production for brands and businesses. All Zinc businesses benefit from a shared platform that offers a wide array of resources, including post-production facilities, cutting-edge broadcast technology, financial services, human resources support, public relations, marketing expertise, and IT assistance. Additionally, some of the services available through Zinc's platform are now being made accessible to third-party production companies as a means of generating revenue.

The first six months of 2023 have seen a number of creative highlights and further new business launches in the Group.

Our television labels continue to produce some of the UK's most talked about television. H1 2023 has been outstanding for Zinc companies. In January Putin vs The West made global headlines. This was closely followed by Bowelbabe: In Her Own Words, which told the story of cancer campaigner Dame Deborah James, and was featured on the front cover of The Radio Times. Gender Wars for Channel Four sparked nationwide debate as it skilfully explored the complex issue of trans-gender rights. Gold commissioned Blackadder: The Lost Episode which marked the 40th anniversary of the hit show, and the BBC launched a new daytime series Dr Xand's Con or Cure. Further successes included the recommission of many Zinc programmes including the hit Bargain Loving Brits in the Sun for Channel 5. The company announced a partnership with Idris Elba to produce a series investigating the exploitation of Black music artists and a series with Rylan Clark and Rob Rinder. Tern TV's Belfast based division delivered another successful series of the daytime series Critical Incident for BBC ONE and continues to produce the weekly BBC ONE series Sunday Morning Live.

Zinc Communicate continues to grow steadily in the face of a difficult advertiser market which is suppressing brand and marketing spend in the UK. Despite this macro-level context, it secured the Group's biggest ever digital branded content commission Big in America with Alex Polizzi. This was commissioned by the Department for Business & Trade and is being broadcast on LinkedIn. This piece of work demonstrates the power of the wider Group as this was pitched and developed by Zinc Communicate but produced by Tern TV. Zinc Communicate's documentary series The Future of Food, produced in partnership with the World Farmers' Organisation, launches at COP28 in Dubai later this year. Many of the clients in the Zinc Communicate portfolio of businesses and The Edge keep the nature of the work confidential. One significant new venture in H1 was the launch of the Group's first direct to consumer podcast series, Tony Robinson's Cunningcast. Radio programmes in H1 included Marvel vs DC for BBC Sounds.

The Edge is performing ahead of acquisition expectations. H2 is typically its strongest half of the year, driven by activity in the Middle East. Integration is progressing well with the company now co-located with Zinc's other London based businesses. Cross-divisional business development opportunities have been identified and property cost savings will start to be realised from H2 2023.

Despite the challenging wider market, the demand for high quality television and content for brands and businesses remains strong, especially in markets outside the UK, where Zinc has diversified in recent years and is further enhanced by the acquisition of The Edge. Broadcasters, platforms, media owners and brands continue to see content as a differentiator with their consumers. Zinc Media Group now produces for all these markets and, while growing, still maintains a relatively small market share. The Group therefore remains confident of delivering further organic growth and profitability in the period ahead.

Mark Browning

Chief Executive Officer

CFO'S REPORT

INCOME STATEMENT

Group revenues in the reporting period were up by 68% year-on-year to GBP18.1m (H1 2022: GBP10.8m). TV revenues have grown by 20% to GBP11.0m (H1 2022: GBP9.1m), driven by strong performance from the Red Sauce, Supercollider and Rex labels that have only launched in the last few years, plus a strong H1 from Tern. Content Production revenue has grown by 331% to GBP7.1m (H1 2022: GBP1.6m) which is driven by the acquisition of The Edge in H2 2022 .

Gross margins in the period were 41% (H1 2022: 33%), with the growth attributable to The Edge joining the Group which produces content at higher gross margins than traditionally achieved in television. Despite downward pricing and upward cost pressures, gross margins in the TV and Zinc Communicate businesses have been maintained at the same levels as in FY22.

Operating expenses have risen by GBP3.3m to GBP8.7m, a 65% increase on the prior year, which is slightly lower than the Group's revenue growth and is a result of the acquisition of The Edge and continued investment for growth in Zinc Communicate and the new Atomic label in television. Finance costs have risen from GBP0.2m to GBP0.6m due to the unwinding of the discounted deferred consideration in relation to The Edge acquisition and the interest rate on the Group's long-term debt having increased.

Improved profitability is anticipated in H2 2023 as television production is typically weighted to the summer and autumn months. This is in line with market expectations.

Earnings per share

Basic and diluted loss per share in the period was 7.44p (H1 2022: 10.48p).

Dividend

No dividend is proposed. The Board considers the Group's investment plans, financial position and business performance in determining when to pay a dividend.

STATEMENT OF FINANCIAL POSITION

Asset s

Cash at the end of June 2023 was GBP5.8m, having increased by GBP2.2m during the period as a result of working capital improvements.

As at 22 September the Group's cash position was GBP5.7m.

Equity and Liabilities

The GBP2.6m increase in equity and liabilities results from the loss for the period being offset by a GBP4.1m increase in trade and other payables, largely due to an increase in contract liabilities resulting from cash received up front from customers, which will unwind in future periods.

The Group had an outstanding balance on long-term debt of GBP3.5m as at 30 June 2023 which has remained unchanged (2022: GBP3.5m) . The Directors believe the Group has strong shareholder support, evidenced by shareholders investing GBP5.0m in new equity last year to support the acquisition of The Edge. The long-term debt holders are also major shareholders who own 42% of the Group's shares, and the debt has no financial covenants.

Will Sawyer

Chief Financial Officer

 
 Zinc Media Group plc consolidated income statement 
 For the six months ended 30 June 2023 
                                          Unaudited   Unaudited       Audited 
                                          Half Year   Half Year 
                                                 to          to       Year to 
                                            30 June     30 June   31 December 
                                               2023        2022          2022 
                                 Note       GBP'000     GBP'000       GBP'000 
------------------------------  -----  ------------  ----------  ------------ 
 
 Revenue                          3          18,072      10,775        30,083 
 Cost of sales                             (10,636)     (7,263)      (19,880) 
------------------------------  -----  ------------  ----------  ------------ 
 Gross Profit                                 7,436       3,512        10,203 
 Operating expenses                         (8,435)     (5,118)      (13,083) 
 Operating loss                               (999)     (1,606)       (2,880) 
------------------------------  -----  ------------  ----------  ------------ 
 Analysed as: 
 Adjusted EBITDA                                157       (645)            75 
 Depreciation                                 (760)       (385)         (947) 
 Amortisation                                 (231)       (352)         (715) 
 Adjusting Items                  4           (165)       (224)       (1,293) 
 Operating Loss                               (999)     (1,606)       (2,880) 
------------------------------  -----  ------------  ----------  ------------ 
 Finance costs                                (584)       (154)         (390) 
 Finance income                                   2           -             1 
------------------------------  -----  ------------  ----------  ------------ 
 Loss before tax                            (1,581)     (1,760)       (3,269) 
 Taxation (debit)/credit                       (35)          63           987 
 Loss for the period                        (1,616)     (1,697)       (2,282) 
 Attributable to: 
 Equity holders                             (1,623)     (1,701)       (2,297) 
 Non-controlling interest                         7           4            15 
 Retained loss for the period               (1,616)     (1,697)       (2,282) 
------------------------------  -----  ------------  ----------  ------------ 
 
 Earnings per share 
 Basic Loss per Share             5         (7.44)p    (10.48)p      (12.43)p 
 Diluted Loss per Share           5         (7.44)p    (10.48)p      (12.43)p 
------------------------------  -----  ------------  ----------  ------------ 
 
 
 
 Zinc Media Group plc consolidated statement of financial position 
 As at 30 June 2023 
 
 
                                         Unaudited   Unaudited         Audited 
                                           30 June     30 June     31 December 
                                              2023        2022            2022 
                                  Note     GBP'000     GBP'000         GBP'000 
-------------------------------  -----  ----------  ----------  -------------- 
 Assets 
 Non-current assets 
 Goodwill and intangible 
  assets                             6       7,451       3,464           7,671 
 Property, plant and equipment       7       1,126         850           1,056 
 Right-of-use assets                 9         707         943           1,084 
-------------------------------  -----  ----------  ----------  -------------- 
                                             9,284       5,257           9,811 
-------------------------------  -----  ----------  ----------  -------------- 
 Current assets 
 Inventories                                   299          63              73 
 Trade and other receivables         8      11,350       6,327          10,591 
 Cash and cash equivalents                   5,777       2,596           3,632 
                                            17,426       8,986          14,296 
-------------------------------  -----  ----------  ----------  -------------- 
 Total assets                               26,710      14,243          24,107 
-------------------------------  -----  ----------  ----------  -------------- 
 Equity and liabilities 
 Shareholders' equity 
 Called up share capital            12          27          20              27 
 Share premium account                       9,546       4,785           9,546 
 Merger reserve                                558          27             457 
 Share Based payment reserve                   566         369             566 
 Retained earnings                         (5,276)     (3,087)         (3,653) 
-------------------------------  -----  ----------  ----------  -------------- 
 Total equity attributable 
  to equity holders of the 
  parent                                     5,421       2,114           6,943 
 Non-controlling interests                      23          28              16 
-------------------------------  -----  ----------  ----------  -------------- 
 Total Equity                                5,444       2,142           6,959 
 Liabilities 
 Non-current 
 Borrowings                                  3,480       3,471           3,490 
 Provisions                         11         371         250             242 
 Lease liabilities                   9         164         530             352 
 Trade and other payables                    2,643         128           2,476 
                                             6,658       4,379           6,560 
-------------------------------  -----  ----------  ----------  -------------- 
 Current 
 Trade and other payables           10      13,908       7,300           9,753 
 Current tax liabilities                       237           4             160 
 Lease liabilities                   9         463         418             675 
 Borrowings                                      -           -               - 
                                            14,608       7,722          10,588 
-------------------------------  -----  ----------  ----------  -------------- 
 Total liabilities                          21,266      12,101          17,148 
-------------------------------  -----  ----------  ----------  -------------- 
 Total equity and liabilities               26,710      14,243          24,107 
-------------------------------  -----  ----------  ----------  -------------- 
 
 
 
 
   Zinc Media Group plc consolidated statement of cash flows 
 For the six months ended 30 June 2023 
 
                                                                          Unaudited      Unaudited       Audited 
                                                                       Half year to   Half year to       Year to 
                                                                            30 June        30 June   31 December 
                                                                               2023           2022          2022 
                                                                            GBP'000        GBP'000       GBP'000 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 Cash flows from operating activities 
 Loss for the period before tax                                             (1,581)        (1,760)       (3,269) 
 Adjustments for: 
 Depreciation                                                                   760            385           947 
 Amortisation and impairment of intangibles                                     231            352           715 
 Finance costs                                                                  584            154           390 
 Finance income                                                                 (2)              -           (1) 
 Share based payment charge                                                     101             92           180 
 (Gain)/Loss on disposal of assets                                             (14)              -             - 
 Adjustment to property leases                                                (129) 
 Consideration paid in shares                                                     -              -            30 
--------------------------------------------------------------------  -------------  -------------  ------------ 
                                                                               (50)          (777)       (1,008) 
 Decrease/(increase) in inventories                                           (225)            164           191 
 (Increase)/decrease in trade and other receivables                           (720)        (2,440)       (2,841) 
 Increase/(decrease) in trade and other payables                              4,082            501         (975) 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 Cash generated from / (used in) operations                                   3,087        (2,552)       (4,689) 
 Finance income                                                                   2              -             1 
 Finance cost                                                                  (23)              -          (57) 
 Net cash flows (used in)/generated from operating activities                 3,066        (2,552)       (4,689) 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 Investing activities 
 Purchase of property, plant and equipment                                    (322)          (115)         (831) 
 Disposal of property, plant and equipment                                       14 
 Purchase of intangible assets                                                 (12)           (16)          (50) 
 Acquisition of subsidiary net of cash acquired                                   -              -         (324) 
 Net cash flows used in investing activities                                  (320)          (131)       (1,205) 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 Financing activities 
 Borrowings repaid                                                            (203)          (111)         (265) 
 Principal elements of lease payments                                         (400)          (218)         (555) 
 Issue of ordinary share capital (net of issue costs)                             -              -         4,767 
 Dividends paid to NCI                                                                                      (23) 
 Net cash flows generated used in financing activities                        (603)          (329)         3,924 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 Net increase/(decrease) in cash and cash equivalents                         2,143        (3,012)       (1,970) 
 Translation differences                                                          2              -           (6) 
 Cash and cash equivalents at beginning of period                             3,632          5,608         5,608 
 Cash and cash equivalents at end of period                                   5,777          2,596         3,632 
--------------------------------------------------------------------  -------------  -------------  ------------ 
 
 
 
 
                                                                            Total equity 
                                           Share                            attributable 
                                           based                             to equity 
                    Share      Share      payment     Merger    Retained     holders of    Non-controlling    Total 
                    capital    premium    reserve     reserve    earnings    the parent        interest       equity 
                   GBP'000    GBP'000     GBP'000    GBP'000     GBP'000      GBP'000          GBP'000       GBP'000 
 Balance at 1 
  January 2022        20       4,654        155         27        1,158        6,014             12           6,026 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 Total 
  comprehensive 
  income for the 
  year                -          -           -          -        (2,297)      (2,297)            15          (2,282) 
 Equity-settled 
  share-based 
  payments            -          -          180         -           -           180               -            180 
 Shares issued 
  in placing net 
  of expenses         6        4,761         -          -           -          4,767              -           4,767 
 Consideration 
  paid in shares      1          -           -         539          -           540               -            540 
 Shares issued 
  in lieu of 
  fees/Directors 
  remuneration 
  paid in shares      -          -           -          -          30            30               -            30 
 Dividends paid       -          -           -          -           -            -              (23)          (23) 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 Total 
  transactions 
  with owners of 
  the Company         7        4,761        180        539       (2,267)       3,220             (8)          3,212 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 Balance at 31 
  December 2022       27       9,546        457        566       (3,653)       6,943             16           6,959 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 
 Balance at 1 
  January 2022        20       4,785        277         27       (1,386)       3,723             24           3,747 
 Total 
  comprehensive 
  income for the 
  year                -          -           -          -        (1,701)      (1,701)             4          (1,697) 
 Equity-settled 
  share-based 
  payments            -          -          92          -           -            92               -            92 
 Total 
  transactions 
  with owners of 
  the Company         -          -          92          -        (1,701)      (1,609)             4          (1,605) 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 Balance at 30 
  June 2022           20       4,785        369         27       (3,087)       2,114             28           2,142 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 
 Balance at 1 
  January 2023        27       9,546        457        566       (3,653)       6,943             16           6,959 
 Total 
  comprehensive 
  income for the 
  year                -          -           -          -        (1,623)      (1,623)             7          (1,616) 
 Equity-settled 
  share-based 
  payments            -          -          101         -           -           101               -            101 
 Total 
  transactions 
  with owners of 
  the Company         -          -          101         -        (1,623)      (1,522)             7          (1,515) 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 Balance at 30 
  June 2023           27       9,546        558        566       (5,276)       5,421             23           5,444 
----------------  ---------  ---------  ----------  ---------  ----------  -------------  ----------------  -------- 
 

Notes to the consolidated financial statements

   1)   GENERAL INFORMATION 

The Company is a public limited company incorporated in the United Kingdom. The address of its registered office is 4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EN. Its shares are traded on the AIM Market of the London Stock Exchange plc (LSE:ZIN).

   2)   BASIS OF PREPARATION 

The interim results for the six months ended 30 June 2023 have been prepared on the basis of the accounting policies expected to be used in the 2023 Zinc Media Group plc Annual Report and Accounts and in accordance with the recognition and measurement requirements of UK adopted International Accounting Standards (IAS) but does not include all the disclosures that would be required under IAS and should be read in conjunction with the accounts for the period ended 31 December 2022.

The same accounting policies, presentation and methods of computation are followed in these interim condensed set of financial statements as have been applied in the Group's latest annual audited financial statements.

The interim results, which were approved by the Directors on 26 September 2023, are unaudited. The interim results do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

Comparative figures for the 12 months ended 31 December 2022 have been extracted from the statutory accounts for the Group for that period, which carried an unqualified audit report, did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter, did not contain a statement under section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

   3)   SEGMENTAL INFORMATION 

The operations of the group are managed in two principal business divisions that generate revenue: Television and Content production. These divisions are the basis upon which the management reports its primary segmental information. The activities undertaken by the Television segment include the production of television. The Content Production segment includes brand and corporate film production, radio and podcast production and publishing.

 
                                                             Unaudited      Unaudited       Audited 
                                                          Half Year to   Half Year to       Year to 
                                                           30 Jun 2023    30 Jun 2022   31 Dec 2022 
 Revenues by Business Division (continuing operations)         GBP'000        GBP'000       GBP'000 
-------------------------------------------------------  -------------  -------------  ------------ 
 Television                                                     11,004          9,135        20,218 
 Content production                                              7,068          1,640         9,865 
 Total                                                          18,072         10,775        30,083 
-------------------------------------------------------  -------------  -------------  ------------ 
 
   4)   ADJUSTING ITEMS 

Adjusting items are presented separately as, due to their nature or the infrequency of the events giving rise to them, this allows shareholders to understand better the elements of financial performance for the period, to facilitate comparison with prior periods and to assess better the trends of financial performance.

 
                                              Unaudited      Unaudited       Audited 
                                           Half Year to   Half Year to       Year to 
                                            30 Jun 2023    30 Jun 2022   31 Dec 2022 
                                                GBP'000        GBP'000       GBP'000 
----------------------------------------  -------------  -------------  ------------ 
 Reorganisation and restructuring costs            (39)           (52)         (160) 
 Acquisition costs                                    -              -         (953) 
 Share based payment charge                       (101)           (92)         (180) 
 Profit on disposal of assets                        14              -             - 
 Other exceptional items                           (39)           (80)             - 
 Total                                            (165)          (224)       (1,293) 
----------------------------------------  -------------  -------------  ------------ 
 
   5)   EARNINGS PER SHARE 

Basic loss per share (EPS) for the period equals the loss after tax from continuing operations attributable to the Company's ordinary shareholders divided by the weighted average number of issued ordinary shares.

When the Group makes a profit from continuing operations, diluted EPS equals the profit attributable to the Company's ordinary shareholders divided by the diluted weighted average number of issued ordinary shares. When the Group makes a loss from continuing operations, diluted EPS equals the loss attributable to the Company's ordinary shareholders divided by the basic (undiluted) weighted average number of issued ordinary shares. This ensures that EPS on losses is shown in full and not diluted by unexercised share options or awards.

 
                                                            Unaudited      Unaudited       Audited 
                                                         Half Year to   Half Year to       Year to 
                                                          30 Jun 2023    30 Jun 2022   31 Dec 2022 
                                                              GBP'000        GBP'000       GBP'000 
------------------------------------------------------  -------------  -------------  ------------ 
 Weighted average number of shares used 
  in basic and diluted earnings per share calculation      21,806,834     16,200,919    18,480,039 
 Potentially dilutive effect of share options               1,549,458      1,467,502     1,558,184 
------------------------------------------------------  -------------  -------------  ------------ 
 
 
 Basic Loss per Share      (7.44)p   (10.48)p   (12.43)p 
 Diluted Loss per Share    (7.44)p   (10.48)p   (12.43)p 
------------------------  --------  ---------  --------- 
 
   6)   GOODWILL AND INTANGIBLE ASSETS 
 
                                                        Customer              Distribution 
                         Goodwill      Brands      Relationships   Software      Catalogue      Total 
                           GBP000      GBP000             GBP000     GBP000         GBP000     GBP000 
-------------------  ------------  ----------  -----------------  ---------  -------------  --------- 
 Net Book Value 
 At 30 June 2023            4,558       1,376              1,482         35              -      7,451 
------------------------  -------  ----------  -----------------  ---------  -------------  --------- 
 At 30 June 2022            3,055          64                279         37             29      3,464 
 At 31 December 2022        4,558       1,462              1,610         41              -      7,671 
------------------------  -------  ----------  -----------------  ---------  -------------  --------- 
 
 
   7)   PROPERTY, PLANT AND EQUIPMENT 
 
 
                           Land and buildings     Motor Vehicles   Office and computer equipment    Total 
                                       GBP000             GBP000                          GBP000   GBP000 
------------------------  -------------------  -----------------  ------------------------------  ------- 
 Net book value 
------------------------  -------------------  -----------------  ------------------------------  ------- 
 As at 30 June 2023                       146                  6                             974    1,126 
------------------------  -------------------  -----------------  ------------------------------  ------- 
 As at 30 June 2022                       222                  -                             628      850 
 As at 31 December 2022                   185                  7                             864    1,056 
------------------------  -------------------  -----------------  ------------------------------  ------- 
 
   8)   TRADE AND OTHER RECEIVABLES 
 
                                    Unaudited     Unaudited       Audited 
                                  30 Jun 2023   30 Jun 2022   31 Dec 2022 
                                      GBP'000       GBP'000       GBP'000 
-------------------------------  ------------  ------------  ------------ 
 Current 
 Trade receivables                      7,520         4,380         6,872 
 Less provision for impairment          (270)         (467)         (380) 
-------------------------------  ------------  ------------  ------------ 
 Net trade receivables                  7,250         3,913         6,492 
 Prepayments                              566           523           507 
 Other receivables                        787             3         1,047 
 Deferred tax                              41             -             - 
 Contract assets                        2,706         1,888         2,545 
 Total                                 11,350         6,327        10,591 
-------------------------------  ------------  ------------  ------------ 
 

The carrying amount of trade and other receivables approximates to their fair value. The creation and release of provision for impaired receivables have been included in operating expenses in the income statement.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of asset above. The Group does not hold any collateral as security for trade receivables. The Group is not subject to any significant concentrations of credit risk.

   9)   LEASES AND RIGHT OF USE ASSETS 

Right-of-use assets

 
                                           Short leasehold land 
                                                  and buildings   Office and computer equipment     Total 
                                                        GBP'000                         GBP'000   GBP'000 
 Balance as at 30 June 2022                                 867                              76       943 
 Additions                                                    -                              42        42 
 Acquired through business combinations                     433                               -       433 
 Depreciation                                             (283)                            (51)     (334) 
----------------------------------------  ---------------------  ------------------------------  -------- 
 Balance as at 31 December 2022                           1,017                              67     1,084 
 Additions                                                  129                               -       129 
 Depreciation                                             (458)                            (48)     (506) 
----------------------------------------  ---------------------  ------------------------------  -------- 
 Balance as at 30 June 2023                                 688                              19       707 
 

Lease liabilities

Lease liabilities are presented in the statement of financial position as follows:

 
                  Unaudited     Unaudited       Audited 
                30 Jun 2023   30 Jun 2022   31 Dec 2022 
                     GBP000        GBP000       GBP'000 
-------------  ------------  ------------  ------------ 
 Current                463           418           675 
 Non-current            164           530           352 
                        627           948         1,027 
-------------  ------------  ------------  ------------ 
 

10) TRADE AND OTHER PAYABLES

 
                                       Unaudited     Unaudited       Audited 
                                     30 Jun 2023   30 Jun 2022   31 Dec 2022 
                                         GBP'000       GBP'000       GBP'000 
----------------------------------  ------------  ------------  ------------ 
 Current 
 Trade payables                            1,892         1,297         1,415 
 Other payables                               40            67           492 
 Other taxes and social security           1,275           770         1,149 
 Accruals                                  3,949         3,296         4,139 
 Contract liabilities                      5,907         1,870         1,895 
 Contingent consideration payable            845             -           663 
 Total                                    13,908         7,300         9,753 
----------------------------------  ------------  ------------  ------------ 
 Non-Current 
 Contingent consideration payable          2,643             -         2,476 
----------------------------------  ------------  ------------  ------------ 
 Total                                    16,551         7,300        12,229 
----------------------------------  ------------  ------------  ------------ 
 

The Directors consider that the carrying amount of trade and other payables approximates to their fair value. The Group's payables are unsecured.

11) PROVISIONS

 
                    30 
                   Jun    30 Jun    31 Dec 
                  2023      2022      2022 
               GBP'000   GBP'000   GBP'000 
------------  --------  --------  -------- 
 Provisions        371       250       242 
------------  --------  --------  -------- 
 

Movement in provisions

 
                                                                      GBP'000 
 At 30 June 2022                                                          250 
------------------------------------------------------  --------------------- 
 Net decrease in provision in the period                                  (8) 
 At 31 December 2022                                                      242 
------------------------------------------------------  --------------------- 
 Net Increase in provision in the period                                  129 
------------------------------------------------------  --------------------- 
 At 30 June 2023                                                          371 
------------------------------------------------------  --------------------- 
 
 

The provisions relate to dilapidations on property leases.

12) SHARE CAPITAL

 
                                Unaudited Half Year          Unaudited Half Year             Audited Year 
                                    to 30 Jun 23                 to 30 Jun 22               To 31 Dec 2022 
                                                  Share                        Share                      Share 
                               Number of        Capital     Number of        Capital     Number of      Capital 
                                  Shares        GBP'000        Shares        GBP'000        Shares      GBP'000 
 Ordinary Shares 
 At start of period           21,806,834             27    16,200,919             20    16,200,919           20 
 Share placing and 
  subscription for cash                -              -             -              -     5,037,059            6 
 Consideration paid in 
  shares                               -              -             -              -       540,000            1 
 Shares issued in lieu of 
  fees                                 -              -             -              -        28,856          0.3 
 At end of period             21,806,834             27    16,200,919             20    21,806,834           27 
--------------------------  ------------  -------------  ------------  -------------  ------------  ----------- 
 
 Total called up share 
  capital                     21,806,834             27    16,200,919             20    21,806,834           27 
--------------------------  ------------  -------------  ------------  -------------  ------------  ----------- 
 
 

13) POST BALANCE SHEET EVENTS

There are no post balance sheet events to report.

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END

IR PPUGUBUPWGWQ

(END) Dow Jones Newswires

September 27, 2023 02:00 ET (06:00 GMT)

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