Preliminary Results Presentation March 2007. 1.2006 Preliminary Results Review 2.Business Review 3.Prospects Agenda.

Preliminary Results PresentationMarch 2007

1. 2006 Preliminary Results Review

2. Business Review

3. Prospects

Agenda

2006 Overview

Solid operating performance building on last year’s restructuring

Maintained focus on improving the quality of recurring revenues

2006 acquisitions performing well

Financial restructuring completed

Financial Highlights

Full Year Turnover of £8.2m (£7.9m)

up 4%

Recurring revenue of £5.1m (£4.6m) up

11%

Adjusted EBITDA of £1.6m (2005: £1.0m)

up 60%

Adjusted PBT of £0.6m (2005: £nil)Adjusted PBT excludes: profit on sale of head office, non-recurring costs and the amortisation of intangible assets

Dec 2006 Dec 2005

£000 £000

Sales 8,184 7,922

2006 Recurring revenues 5,100

2006 Service & system sales

3,100

Adjusted EBITDA 1,630 1,043

Depreciation of tangible assets (561) (672)

Amortisation of intangible assets (1,903) (1,980)

One-off corporate restructuring (109) (216)

Charge for share scheme awards (145) (111)

Operating loss (1,088) (1,936)

Profit on sale of asset 609 -

Interest (293) (259)

Loss before taxation (772) (2,195)

Taxation 361 -

Loss after taxation (411) (2,195)

2006 Preliminary Results

2006 2005

£000 £000

Intangible fixed assets 9,438 10,124

Tangible fixed assets 891 2,006

Deferred tax asset 361 -

Total fixed assets 10,690 12,130

Stock 440 482

Debtors 2,510 2,051

Total assets 13,640 14,663

Bank overdraft (1,085) (558)

Interest-bearing loans and borrowings (112) (2,747)

Trade and other payables (3,709) (4,215)

Current Liabilities (4,906) (7,520)

Non current interest-bearing loans and borrowings (1,437) -

Total Liabilities (6,343) (7,520)

Net assets 7,297 7,143

Consolidated Balance Sheet

Improved financial position

£’000s 2006 2005

Current portion of secured bank loans 102 2,716

Current portion of Finance lease liabilities

10 31

Unsecured bank overdraft 1,085 558

1,197 3,305

Oct 2006: Issued £1.45m of 5% convertible loan notes (2012) to Quester Plc

Business Review

New clients and renewals increase subscriber sites to 13,383 (12,937)

Major wins include:

New sites and renewals at:

MusicStyling.com performing well:

Impact Automedia (“Brand radio”) adds:

– Cost benefit from “Waterfront” studios

Trading Highlights

New offering in “Young persons” bar sector

Distributor appointed for Iberian Peninsular

Growing take up of broadband delivery systems

Still awaiting decision on PPL from Copyright Tribunal

(Portugal)

Trading Highlights

Sale and leaseback of Chesterfield head office– £1.6m (pre expenses)– £1.2m used to reduce debt– £0.4m (less expenses) to working capital – Book value of asset £980k – exceptional profit c.

£0.6m– 10 year lease at initial rent of £114,500 p.a.

Net bank debt reduced to £1.3m at year end £1.5m convertible loan note from Quester plc New banking facilities in place

– £7m of acquisition financing

Financial restructuring

Retail and leisure markets remain challenging– Increasing the importance of brand differentiation– Pipeline of opportunities & renewals

Strengthened management– Oliver Wilson - Sales Director (ex Avanti Screen Media)– Stephen Yapp - Non-Executive Director

Full year impact of acquisitions to come

Confident of further progress in 2007

Near term Outlook

Market opportunity remains attractive (UK and Europe) Continue to improve operational gearing & profitability

– Focus on higher quality clients– Adding new subscribers to existing systems

Large number of outlets still not using a third party provider

Fragmented sector offers opportunities for further consolidation

Longer term outlook

Appendix

Name Outlet Key customers

DMX UK 16,000 Boots, Arcadia Group, H&M

Imagesound plc 13,383 45 major retail & leisure clients

TSG 4,500 Lloyds No1, Pizza hut

Immedia plc 4,500 Lloyds Chemist, Londis

TSC 2,000 Burger King, Café Nero

GMS 1,000 MFI, Clarks

Avanti 1,500 Toni & Guy, Translusis

Kalidovision 1200 Venue Bars

Creative Retail Entertainment 1,200 M&B Birthdays

Team Talk 1,200 Asda, Allsports

C-Burn 1,000 Conran Restaurants, S&N

Radio Ga Ga 500 All Bar One

Competitor analysis – UK suppliers

Derek Mapp Executive ChairmanFounder of Tom Cobleigh plc & LeapfrogChairman of Staffline plc and senior NED at Informa plc

Michael Clark Managing Director Imagesound founder

Ken Pratt Finance DirectorFormer FD and co-Director of Tom Cobleigh plc and Eton Group Limited

Richard Gregory Non-exec DirectorFormer Managing Director Yorkshire TelevisionNon-exec Director of Yorkshire & Clydesdale Banks and National Australia Group Europe Limited

Stephen Yapp Non-exec Director (Chairs Audit Committee)

Previously DCS Group

David Clayton-Smith Non-exec DirectorManagement Consultant12 yrs retail experience with Halfords, Boots, Do It AllGroup Marketing Director of Courage

Directors

Imagesound plc.Venture Way

Dunston Technology ParkChesterfield

S41 8NET: 01246 572 990

www.imagesound.co.uk