2005 Results Presentation

Today’s Agenda

1. 2005 Results review

2. Business Review

3. 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]– 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

2005 Final Results

Year ended 31st December 2005

£’000’sSales 7,922

Recurring revenues 4,818 Service sales 597System sales 2,507

Adjusted EBITDA 1,326Depreciation (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

Consolidated Balance Sheet

31st December 31st December£ 000's 2005 2004

Intangible fixed assets 12,642 12,312

Tangible fixed assets 2,006 2,326

Total fixed assets 14,648 14,638

Stock 482 536

Debtors 2,051 2,342

Total assets 17,181 17,516

Deferred consideration (300) (1,170)Trade creditors (622) (932)Accruals and deferred income(1,648) (2,161)Other creditors (1,452) (1,063)Social security and other taxes (284) (200)Creditors (4,306) (5,592)

Net finance creditors (3,305) (1,610)

Net assets 9,570 10,314

Business Review

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

Sales Mix

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2000

3000

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Custom Music Custom Radio Custom TV

200320042005

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

• 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

Strategic Actions

Future Prospects

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

• 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

Longer term outlook

Competitor Analysis – Major UK suppliers

Name Outlets Key CustomersDMX UK 20,000 Boots, Arcadia Group, H&M

Imagesound plc 12,937 45 major retail & leisure clients

TSG 4,500 Lloyds No1, Pizza Hut

Immedia plc 4,500 Lloyds Chemist, Londis

TSC 3,000 Burger King, Café Nero

GMS 2,000 MFI, C larksAvanti 1,500 Toni & Guy, TranslusisCreative Retail Entertainment 1,220 M&B, BirthdaysTeamTalk 1,200 Asda, AllsportsAtmospheric 700 Esporta, CannonsC-Burn 500 Conran Restaurants, S&NRadio Ga Ga 500 All Bar OneKalidovision 500 Venue Bars

Board of Directors

Derek Mapp* ChairmanFounder of Tom Cobleigh plc & Leapfrogformerly Chairman EMDAChairman of Staffline plc and senior NED at Informa plc

Michael Clark* Managing Director Imagesound CEO

Ken Pratt* Finance Directorformerly Finance Director of Eton Group plcPrior to that, Finance Director Tom Cobleigh plc

Richard Gregory Non-exec & Senior Independent DirectorFormer Managing Director Yorkshire TelevisionNon-exec Director of Yorkshire & Clydesdale Banks and

National Australia Group Europe Limited

Charles Fairbairn Non-exec DirectorNon-exec Director of Research Now plc, Statpro and Bright

Things plcFinance Director of Perspective Capital plc and CCO Capital plc

*Today’s Presentation Team