Ticker:  MTG

Website: www.mediatechnology.co.nz

MD: Allan Morton

Chairman: Chris Due

Annual meeting date: TBC - due late 2006

Shares.net.nz comment

Media Technology Group Limited (MTG) was listed through the reverse listing process via the Strathmore shell in 2004 with the company, at the time, forecasting an operating profit of around $1.0 million.

Since then MTG has continually performed below expectations, reporting losses of $227,000 in 2005 and $659,000 (including $310,000 depreciation) in 2006.

MTG's business centres around adding value to the production of digital media, specifically CDs and DVDs, typically produced as marketing material for corporate clients.

However the company appears to be having trouble gaining cost benefits while expanding its business base and at the same time is finding itself exposed to shrinking margins on disk production.

MTG employs 100 people in Auckland, Brisbane, Canberra, Melbourne, Sydney and Wellington. Since balance date the company has embarked on further restructuring of its business to reduce costs to achieve a more positive result off a more constant revenue base.

The company's task is to "Restructure, Refocus and Revitalise" Media Technology around integrated online delivery.

They have recently released their "broadband by post" initiative into parts of the Australian market. It provides corporate marketers and communications professionals an introduction to the now proven benefits of using "Disc + Mailer + Post" as a direct marketing bridge from the letterbox to the internet.

Financial Comment

Media Technology Group has 85,531,889 shares on issue @ .06 cents giving a market cap of $5,250,000. MTG would need to produce a profit of $500,000- $600,000 to gain a market pe of 9-10.

At this stage it would appear that management will have their work cut out to achieve this outcome.

Company comments on its latest result

"Media Technology Group continues its transition into a digital media logistics solution provider," the company said in June, at the release of its full-year result.

"The Company has further reduced its cost base and refined its business structure in line with its changing business model. An EBITDA deficit of $347,000 for the full year, including a deficit of $201,000 for the first half to 30 Sept 2005, was lower than anticipated as revenue in the 4th quarter was lower than expected."

Latest financial result (full year)

Audited figures for the year to March 31, 2006

(Released 29 June, 2006 - figures in $NZ'000)

                                                This year            Previous year               Change

Trading revenue                        $17,839            $20,210                      -15.9%

Other revenue                           -                       -                      

Total Operating Revenue             $17,839            $20,210                      -15.9%

Pretax surplus/(deficit)            ($1,009)         ($133)                          -659%

Tax                                          ($465)              $19

Net profit/(loss)                        ($544)              ($152)                          -258%

Recent milestones

October 2005             MTG announces that it is not proceeding with its acquisition of Microview Solutions Limited, a conditional agreement announced to the market in September. The company says it has been unable to complete a key condition of the contract to the satisfaction of the board of MTG, who have informed the vendor that MTG is not proceeding with the acquisition.

October 2005             MTG moves its listing from the main NZX board to the NZAX Market.

September 2005    MTG announces that it has entered into a conditional agreement to acquire the multimedia business of Sydney-based Microview Solutions Limited in a deal worth AUD $450,000. The agreement is conditional on due diligence, employee contracts and completing MTG's funding arrangements for the acquisition.

February 2005             MTG chairman Phil Norman resigns. He is replaced in late March by Chris Due.

January 2004              Media Technology Group lists on the main board of the NZX through the shell of technology company investor Strathmore Group.

Company activities

Media Technology Group wraps high-valued services around the production and distribution of physical digital media products and services. A significant portion of the company's revenue is derived from services such as providing CDs and DVDs on demand, offering a "broadband-by-post" delivery service, providing product design and packaging services, online fulfilment and online solutions.

MTG has a staff of 100 across offices in Auckland, Wellington, Brisbane, Canberra, Melbourne, Sydney.