Preliminary Results PresentationMarch 2008

1. Overview

2. Market Background

3. Preliminary Results

4. Outlook

5. Appendix

Agenda

Investment Overview

Leading provider of in-store music, messaging and AV

Good earnings visibility:

– 64% recurring revenues

– typical contracts of 3+ years

High quality blue chip client base

Proven consolidator in highly fragmented sector

International growth opportunities - under-developed markets in contrast to

UK

Experienced, ambitious and proven management team

The Background Music (BGM) sector emerged on the back of the‘branded’ retail and leisure boom of the 80’s and 90’s

Background music and messaging are now very established in retail and leisure as brand reinforcement tools

• Control the audio environment• Creating a point of differentiation

Increasingly being used to make a ‘Foreground’ contribution…

• Tactically communicating key offers and promotions• Increasing dwell times and driving customer spend

Fragmented market, with 10 identified direct competitors (including two quoted companies – Immedia and Avanti Screenmedia)

Market Background

Established in 1998 to exploit emerging MPEG and low cost satellite airtime opportunities

Investment capital secured in 2000 from Quester to develop robust software and operating systems and platform for sector consolidation

Six acquisitions completed to date (aggregate value of £22m):

– July 04 - Reverse takeover of ACI plc (AIM listed cash shell)- Acquisition of TTL Music and Rolec

– June 05 - Acquisition of Ideal Music– May 06 - Acquisition of Music Styling.com– Sept 06 - Acquisition of Impact Automedia– July 07 - Acquisition of TSC Music Systems Ltd

Imagesound History

UK’s leading listed supplier of in-store music, radio and AV services

Two market leading trading brands:– Imagesound (retail & leisure chains)– MusicStyling (luxury hotels)

Offices in Chesterfield and Vancouver

76 staff

Growing international presence:– Distributor agreements signed in 2007 covering Portugal/Spain,

Middle East and Eastern Europe– 21% revenues currently from international business

Refocused management roles

Imagesound Today

Music Styling

Acquired May 2006 Consultancy approach 1700 music ‘zones’ 447 hotels 75 countries worldwide Office in Vancouver to

serve N. American market 24/7 multi-lingual hotline

for worldwide support established

“Imagesound help us get the music right for everyone, hour after hour, day after day.”

“Sales uplifts on advertised lines have been as high as 24.5% and are currently averaging an impressive 16%.”

“Since introducing FootlockerTV, our customer awareness surveys revealed a 26% increase in Footlocker brand awareness.”

Offer Driven Chains

Mainstream Chains

High Profile Chains

Imagesound Offer

Imagesound provides music and messaging services to 50+ leading branded retail and leisure chains reaching 17,800 subscriber outlets

Blue chip client base

2007 Operational Highlights

Subscriber outlet growth - 17,800 sites/zones (06: 13,383)

Major renewals and additional sites secured with Wickes, Superdrug, Bon Marche, HBOS, Foot Locker, Phase8 and Poundland

New contracts signed with Au Naturelle (180 stores), Swarovski (45 stores), Richleys (28 stores), Slug & Lettuce (92 bars), Ha Ha bars (27 bars)

MusicStyling 175 site roll-out to Marriott and Rezidor chains completed with continued work with Hyatt, Starwood & Marriott

Distributor agreements signed covering Portugal/Spain, Middle East and Eastern Europe

Transitioning from satellite to web-based delivery solution offering efficiencies and cost savings

2007 Financial Highlights

Revenue up 8% to £8.8m (2006: £8.2m)

– Recurring revenues up 10% to £5.6m (£5.1m)– International revenues now 21% of total recurring revenue (2006:

9%)

Adjusted* EBITDA up 38% to £2.3m (2006: £1.6m)

Adjusted* EBITDA margin increased 6 percentage points to 26%

Operating loss reduced by 36% to £0.7m (2006: £1.1m)

Reported loss before tax £1.1m (2006: £0.8m)

Adjusted* earnings per share up 45% to 1.81p (2006: 1.25p)

Cash from operations of £1.5m (2006: £0.1m)

* Adjusted to exclude amortisation of intangible assets, non-recurring expenditure, share based payments and tax

2007 FY Results

Pro forma Income Statement Year ended

31-Dec-07Year ended31-Dec-06

(Unaudited) (As restated)

Revenue 8,841 8,184

Adjusted EBITDA 2,257 1,630

Depreciation (744) (561)

Adjusted Operating Profit 1,513 1,069

Non recurring expenditure (587) (109)

Amortisation of intangible assets (1,494) (1,903)

Share based payment charge (133) (145)

Operating loss (701) (1,088)

Profit on sale of head office - 609

Net financing costs (362) (293)

Loss before tax (1,063) (772)

Taxation 272 932

(Loss)/Profit after Tax (791) 160

Adjusted Earnings per share (p) 1.81 1.25

Weighed average number of shares 63,312,500 61,945,000

Consolidated Balance Sheet 2007 2006

£000 £000

Intangible fixed assets 15,010 11,262

Tangible fixed assets 1,787 891

Deferred tax asset 19 -

Total fixed assets 16,816 12,153

Stock 551 440

Debtors 3,386 2,510

Total assets 20,753 15,103

Bank overdraft (624) (1,085)

Interest-bearing loans and borrowings (918) (112)

Trade and other payables (4,644) (3,807)

Current Liabilities (6,186) (5,004)

Non current interest-bearing loans and borrowings (6,563) (1,437)

Total Liabilities (12,749) (6,441)

Net assets 8,004 8,662

Consolidated Cash Flow Statement

2007 2006

£000 £000

Operating profit before changes in working capital and provisions 1,668 1,520

Working Capital 166 (1,457)

Interest Paid (336) (239)

Capital Expenditure (1,402) 1,190

Acquisitions (5,231) (384)

Repayment Loans (107) (2,657)

Drawdown on expansion facility 6,035 1,500

Net Increase/ (Decrease) in cash equivalents 461 (527)

• Recurring Revenue = the hire of music services and equipment• Non Recurring Revenues = the installation of equipment & servicing

costs

2007 Total Revenues £8.8m

36% Non-Recurring

64% Recurring

Good earnings visibility

2007 Total Recurring Revenues £5.6m

21% International 79%

UK

Geographic Split

• International Revenue = Music Styling + partnership deals inSpain/Portugal, Dubai and

Budapest

Major supplier of music services to branded fashion retail, coffee chain, fast food and retail financial services sectors

Acquired July 2007 and fully integrated within 6 months £4.75m in cash 3,500 outlets across the UK Significant synergies and cost savings realised Organic growth within client base with continued roll-outs across

Starbucks, Orange, Caffé Nero, Alliance & Leicester and Gala Bingo

Acquisition of TSC Music Systems Ltd

Retail and leisure markets remain challenging– Increasing the importance of brand differentiation

Continue to improve operational gearing & profitability

– New client wins– Advancements in technology improve margins

Large number of outlets still not using a third party provider (c.75%)

Opportunities for further international expansion– Roll-out UK customers internationally– Win new clients within underdeveloped markets for BGM

Fragmented sector offers opportunities for further consolidation– Re-shaped balance sheet & banking facilities in place

Outlook

Appendix

Name Outlet Key customers

Mood / DMX UK 23,000 Boots, Arcadia Group, H&M

Imagesound plc 17,800 50 major retail & leisure clients

TSG 4,500 Lloyds No1, Pizza Hut

Immedia plc 3,000 Lloyds Chemist, Londis

GMS 1,000 MFI

Avanti Screenmedia 1,500 Toni & Guy, Translusis

Kalidovision 1,200 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

* Source: Management estimates

Derek Mapp Executive ChairmanFounder of Tom Cobleigh plc & Leapfrog Day NurseriesChairman of Staffline plc and senior NED of Informa plc

Michael Clark Managing Director - Sales & Marketing Imagesound founder

Ken Pratt Managing Director - Finance & OperationsFormer 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)

Chairman of Watermark PlcPreviously CEO of DCS Group

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

Directors

Imagesound plc.Venture Way

Dunston Technology ParkChesterfield

S41 8NET: 01246 572 990

www.imagesound.co.uk