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2005 Results Presentation

2005 Results Presentation. Today’s Agenda. 2005 Results review Business Review Future Prospects. 2005 Overview. Challenging year – internally and externally Core subscriber business held up well to pressure on High Street spending Overall subscriber numbers increased 12% to [12,932]

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2005 Results Presentation

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  1. 2005 Results Presentation

  2. Today’s Agenda • 2005 Results review • Business Review • Future Prospects

  3. 2005 Overview • Challenging year – internally and externally • Core subscriber business held up well to pressure on High Street spending • Overall subscriber numbers increased 12% to [12,932] • Acquisition of Ideal Music & Media • System sales below expectations: • Consumer spending impact on client spending • Legacy warranty issues • Strengthened Management team • Business restructuring in Q4 to focus on core growth opportunities

  4. 2005 Final Results Year ended 31st December 2005 £’000’s Sales 7,922 Recurring revenues 4,818 Service sales 597 System sales 2,507 Adjusted EBITDA 1,326 Depreciation (672) Adjusted operating profit 654 One-off warranty obligations (278) One-off overhead expenditure (216) Operating profit 160 Amortisation of goodwill (645) Interest (250) Profit/(Loss) before Tax (744) Earnings/(Loss) per share (1.24)p

  5. Consolidated Balance Sheet

  6. Business Review

  7. Trading Highlights • Subscriber sites increased from 11,560 to 12,937 • New client wins include: • Progress on existing roll-outs: • Linux based AV roll-outs: • Acquisition of Ideal Music completed at end of H1

  8. Sales Mix

  9. Other operational actions • Operating efficiency measures • Adoption of Linux based software for all Audio and AV players • Migration of all clients on common operating system • Addressed warranty issue • Thorough review of installed base • Upfront investment of £278k to bring inherited systems up to standard • Tightened sales/contract process to avoid repetition • Investment in non-licensed music channels • Mitigates impact of proposed PPL licence fee increases • 1,000 subscriber sites from January 2006

  10. Strategic Actions • Restructured business to focus on growth opportunities • Exited “pro-audio” sector, reducing stock levels, service costs and warranty exposure • Closure and relocation of London manufacturing operations • Headcount reduction from 60 to 51 during the year • Exceptional reorganisation costs of £0.2m incurred in 2005 • Strengthened executive management team • Derek Mapp appointed Executive Chairman in Sept 05 • Ken Pratt appointed Finance Director in March 06

  11. Future Prospects

  12. Near term outlook • Strong order book and sales pipeline • Improved operational efficiency & service • Competitive market and challenging retail environment • Reduced exposure to volatile systems sales • Strengthened management team and financial systems

  13. Longer term outlook • Market opportunity remains very attractive • Operational gearing from adding new subscribers to existing system and operational structure • Large number of outlets still not using a third party provider • Fragmented sector offers opportunities for further consolidation

  14. Competitor Analysis – Major UK suppliers

  15. Board of Directors Derek Mapp* Chairman Founder of Tom Cobleigh plc & Leapfrog formerly Chairman EMDA Chairman of Staffline plc and senior NED at Informa plc Michael Clark* Managing Director Imagesound CEO Ken Pratt* Finance Director formerly Finance Director of Eton Group plc Prior to that, Finance Director Tom Cobleigh plc Richard Gregory Non-exec & Senior Independent Director Former Managing Director Yorkshire Television Non-exec Director of Yorkshire & Clydesdale Banks and National Australia Group Europe Limited Charles Fairbairn Non-exec Director Non-exec Director of Research Now plc, Statpro and Bright Things plc Finance Director of Perspective Capital plc and CCO Capital plc *Today’s Presentation Team

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