https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MDZ/13793984.html
In short "for the half year ending 30 September 2018, the Board expects to report revenue in the region of £1.8million (2017 £1.3million) and a maiden Net Profit for the Group of approximately £90,000 (2017: loss of £149,000)."
Now that's impressive for a company with a market cap. of less than £1.5m.
So what's my relationship with this company? Well I have a small amount invested in Mediazest which is just enough to keep me interested.
Late 2016, almost on a whim I bought a reasonable sized holding in MDZ when I was seduced by it's lowly market cap., promises of imminent profitability and hints at game changing contracts in the offing. Sadly, over the next year, these promises and game changers came to nought and the share price sank accordingly and I was left sitting on paper losses.
Bizarrely, at the back end of 2017, out of nowhere up pops a guy called Ian Hallett who begins the process of buying 20% of Mediazest, and the share price quickly accelerates upwards. I'm not complaining, I sell the majority of my shares into the rise and make around 10%. Not great but significantly better than the losses I'd previously been sitting on.
In truth, I half expected an offer to materialise for the company so I held a few but I'd reflected on my initial impetuousness and decided that given Mediazest's history and less than convincing balance sheet that I couldn't look a gift horse in the mouth and was largely happy to sell the vast bulk of my shareholding for a small profit.
Equally bizarrely, Ian Hallett then sold his entire 20% holding within a year and the share price slumped again as quickly as it had risen, so overall I feel I've made the right decision but I'm equally happy to have a small holding in Mediazest given yesterday's trading update.
I've mentioned a couple of bear points and until we see the interims it's impossible to guess how the balance sheet looks. Clearly cashflow and cash at hand are important measures that were not referred to in the trading update. However, the fact that they've made a maiden profit (albeit for six months) is very encouraging, particularly in the context of a significant amount of recurring revenues being
generated and the associated higher margins. It's also worth noting that Mediazest boast an impressive client roster including Volkswagen, Clydesdale and Yorkshire Banking Group, HP, Opel, BMW, Ted Baker, Diesel, Kuoni, HMV, Halfords, Hyundai and several others. That's not bad is it?
I consider my holding here speculative. However, given the market cap. and illiquidity of dealing in the shares, if Mediazest do continue their growth and consistently deliver increasing recurring revenues and profits going forward then the share price will undoubtedly multibag.
As ever, these are just my thoughts and dealings and no advice is intended.
twitter: @michae1mouse
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