Zoo Digital Share Discussion Threads

[devonport] 04/9/2008 17:59

Another loss + another placement + looking good for the future = Deja Vu. If it wasn't for the fact that I'm a lot balder and fatter I could be mistaken for thinking this is 2003.

[magnetincognito] 04/9/2008 15:58

Pierre Oreilly: thats why they have scheduled the trading statement for the
same day next month, perhaps after reading it, it wont look like a 25% premium
after all, but we will see,

[pierre oreilly] 04/9/2008 09:16

In my 30 years of investing, I don't ever recall a placing at a 25% premium to the market price. Much better than a 25/50% discount (as I would have expected) but still seems very odd. The major person to take up the rights will be thye MD of course, the other institutions mentioned just 'support' the placing, whatever that means - it certainly leaves room for them not to subscribe unless the price rises above 15p of course.

Zoo still lives (a bit of a surprise there), and that in itself is good news for shareholders. I just hope Doc Stuart has deep pockets to keep pumping money in for the placings to come after the current placing.

[deanroberthunt] 04/9/2008 08:54

lab305....the results are historic and were always going to show a loss, the profitability (trading, or adjusted operating as its normally called) is for this financial year (although I'll reserve judgement until I see it in ink)...imo the forward statements were pretty positive and the market tend to agree....

UK, you and I know its dilution, if your man wants to believe otherwise then let him be.

[uknighted] 04/9/2008 08:30

Morning DRH
Just out for a soaking on the golf course so havent really had time to digest. Will read in depth and comment later.
Regards
UK
Diggerdaws, it is "dilution" as any experienced investor understands it.

[lab305] 04/9/2008 08:29

Well here we go again with another loss , and they need yet more money.Didn't they say last rns that they would be in profit next time? Could someone clarify that. I am still straight up at £5.

[diggerdaws] 04/9/2008 08:25

The % has been diluted but not the overall value, smaller piece of a bigger cake

[deanroberthunt] 04/9/2008 08:22

morning UK...

Good enough for me to hold......AGM might throw us some more crumbs

[uknighted] 04/9/2008 08:20

It is dilution in that if you owned, say, 1% of the company and you are not a "major shareholder" and therefore not participating in the placing, then the issue of new shares means you no longer hold 1%. Your holding has been diluted.
Regards
UK

[deanroberthunt] 04/9/2008 08:20

more shares in issue...its called dilution.

[diggerdaws] 04/9/2008 08:14

how can it be dilution if issue price is same as share price. Yes we get more shareholders but we also get the asset of cash?

[bodgit] 04/9/2008 07:58

ZOO results. Well supported placing at a modest premium. Into operating profit now. No new big contracts yet but prospects looking very good. Same old same old.... Another one to go into the bottom drawer.

[deanroberthunt] 04/9/2008 07:24

Its only an operating profit (probably not much), pbt will still be in the red...we'll know the numbers at the AGM, 6th October.

No idea how the market will react....

Need the $ to kick on...double edged sword for me, as I holiday anually in the States :¬( with the benefit, should have bought a load of $$$$$$ when its was well over 2

new MCAP £2.58m

[william-just] 04/9/2008 07:21

And what value in £ is the first 5 months profit.

[deanroberthunt] 04/9/2008 07:15

A bit mixed imo....seem to still be in the transition phase

Cash burn seems to be an issue......reduced from £2m to £675k
This is further indicated by another placing, ok they had one eye on shareholders by doing it at 15p, and taken up by existing shareholders and Directors, when most would have stuffed us and issued one at a massive discount....but its yet more dilution

The critical point here is whether they can grow the business to fund working capital from generated cashflow instead of placings.

Generated a trading profit for first 5 months....still not a "true" profit then, yet.....but how much is attributable to the strengthening $, rather than in house efficiency improvements?

Not long to wait for another update on H1....one month

Opinion: Not three bad, must try harder

[william-just] 04/9/2008 07:11

placeing at 15p

[william-just] 04/9/2008 07:09

Zoo Digital Final Results




RNS Number : 6976C
Zoo Digital Group PLC
04 September 2008

4th September 2008


ZOO DIGITAL GROUP PLC
("ZOO" or "the Group")


PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2008


ZOO Digital Group plc, the digital media production technology company, today announces
its financial results for the year ended 31
March 2008.

Operational highlights
* 15 year contract signed with a major Hollywood studio
* Adoption of ZOO's tools by Sony Pictures
* Significant US presence created through acquisition of Scope Seven
* Exposure to new markets following launch of the Media Adaptation Tool, which enables
the automated regionalization and size
adaptation of print, packaging and marketing materials, which is already generating
significant new revenue streams


Financial highlights
* Announcement of proposed fundraising by way of a placing of ordinary shares to raise
£512,000 before expenses to augment working
capital
* Turnover, excluding Scope Seven, increased by 28% to £1.9 million (2007: £1.5
million)
* Loss before interest, tax, depreciation and amortisation increased to £1.4 million
(2007: £0.9 million) due to planned investment
* Encouraging start to the new financial year with technology licensing sales up
significantly compared to the same period last
year
* The Group has generated a trading profit for the first five months of the new
financial year



Stuart Green, CEO of ZOO Digital Group plc said "The past year has been one of transition
and we are pleased with the progress we have
made. Through the acquisition of Scope Seven we have created a compelling offering for US
markets, combining technology with service and
increasing our resources and presence close to our core studio customers in Hollywood. This
has been a key factor in the winning of a 15
year contract and in the wider adoption of ZOO's tools".

For further enquiries please contact:

ZOO Digital Group plc Tel: [phone]
Stuart Green - Chief Executive Officer
Helen Gilder - Group Finance Director

KBC Peel Hunt Ltd Tel: [phone]
Richard Kauffer/Daniel Harris

Weber Shandwick Financial Tel: [phone]
Nick Dibden/John Moriarty


CHAIRMAN'S STATEMENT

Introduction

I am pleased to report a year of significant progress for ZOO during which the focus of
the Board has been on transitioning the business
to allow us to maximise the return on the technological investments of the past few years. We
have continued to focus on Hollywood-based
organisations and determined that growth would be accelerated through the broadening of the
service component of our offering. We have
achieved this through the acquisition of Scope Seven and are now able to combine our
technology solutions with efficient production services
and deliver a compelling and clearly differentiated proposition to our customers.

We have broadened our portfolio of products and services with the launch of the Media
Adaptation Tool, which is already delivering
significant additional revenue streams in the form of consulting, implementation and
production services as well as technology licensing
fees. This forms part of our strategy to build revenues through a wide and robust mix of
value-added services.

I am particularly delighted with a significant software licensing and services contract
that we completed with a major Hollywood studio
that provides commitments over the 15 year term of the agreement. This is one example of how
our business proposition to help customers
improve productivity and reduce their costs is becoming increasingly attractive in the current
challenging economic climate.

Financial review

Our financial results reflected planned investment and the costs of integrating Scope
Seven. Loss before interest, tax, depreciation and
amortisation was £1.37 million (2007: £940,000).

Revenues from Scope Seven initially fell short of expectations as the business
transitioned from serving studios via GDMX, an
intermediary, to pursuing instead direct relationships. For the future, this transition is
advantageous to ZOO as the GDMX relationship
restricted us from dealing directly with several studios and we have since been able to
replace the revenues with business from a broader
base of clients. By the end of the year, revenue had recovered to the level anticipated at the
time of the acquisition.

I am pleased to report a like for like increase in turnover of 28% to £1.9 million for
technology licensing (2007: £1.5 million). The
loss for the year from the technology division was reduced to £191,000 (2007: £322,000).

The cash balance has reduced during the year ended 31 March 2008 from £2.0 million to
£675,000. We have undertaken a restructuring of
the business to ensure that we remain efficient and we continue to operate rigorous cost
controls. Recent months' sales have shown increases
to existing customers as well as the provision of products and services to new customers. In
addition, since the majority of ZOO's revenues
are paid in US dollars, we have benefited from the recent exchange rate movements. We are
pleased to report the Group has generated a
trading profit for the first five months of the new financial year with sales and costs being
in line with our plans. To strengthen the
balance sheet we have announced a proposal to raise additional funds from our existing major
shareholders through a placing of ordinary
shares as described below.

The results for the 12 months ended 31 March 2008 are reported under IFRS for the first
time. Overall moving from UK GAAP to IFRS has
had no significant impact on the reported results in the current period. It had a significant
impact on the results for last year through
the changes in revenue recognition and the treatment of goodwill. In total the loss for the
year ended 31 March 2007 was reduced by
£819,000. An explanation of how the transition from UK GAAP to IFRS has affected the Group's
financial position, income statement and cash
flows is set out in note 35.

Proposed placing of new ordinary shares

We have also, today, announced a proposal for a capital raising by way of the placing of
3,413,333 new ordinary shares at a placing
price of 15p each to raise approximately £512,000 before expenses which will be used to
augment ZOO's working capital requirements. This
placing price represents a premium of 25% over the closing middle market price of 12p per
ordinary share as at 3 September 2008 being the
last business day before the date of the announcement.

I am delighted to report that our CEO, Stuart Green, and two of our major shareholders,
Herald Investment Management Limited and South
Yorkshire Investment Fund, have demonstrated their support of the Group by committing to
subscribe to the placing.

Full details on the proposed placing are contained in a separate announcement.


Trading Overview

The acquisition of Scope Seven has proved very positive in terms of the Group's strategic
position. This business is now fully
integrated into the Group with both Scope Seven and ZOOtech benefiting from the experience,
knowledge and client base of the other. We are
now able to offer our clients the choice of licensing our software tools or using our
software-enabled service facility. The direct
relationships we have been able to establish with a number of major Hollywood studios have
enabled us to perform a greater range of work.
Particularly encouraging is the speed with which work has built up with new clients and the
very high standards of work quality that we
consistently deliver. Following the adoption of Blu-ray as the industry format for next
generation home video the Group is well positioned
to benefit from the increase in titles being produced for this platform through the unique
software solutions that we have been developing.

A new tool in our portfolio, the Media Adaptation Tool, was released in March 2008. This
tool, which offers our customers the
opportunity to automate the regionalisation and size adaptation of any print artwork, is
already generating significant revenues and opens
up new markets and business sectors for ZOO's products and services. Its availability was a
key factor in securing the long term contract
with a major Hollywood studio. The contract also covers ZOOtech's existing products which are
considered to be proven solutions and are used
in the production of the vast majority of the studio's DVD titles. The contract is for a
period of 15 years with break points every five
years. Our Templated Authoring System has been adopted by Sony Pictures and is under
evaluation by other studios.

The UK interactive DVD market has declined in the past twelve months, confirming our
decision two years ago to dispose of the Group's
publishing activity in this market. However, we have enjoyed a growth in interactive DVD
production work in the USA from customers that
include major toy companies who have increased their publishing activity. Scope Seven is
regarded as a leading production services supplier
in this market and we have secured the position of preferred vendor with a number of these
major customers.

Staff

As a Board, we recognise that it is the dedication, quality and enthusiasm of ZOO's
employees that underpins the success of the Group.
We do not underestimate the skills and talents that our people bring, and on behalf of the
Board, I would like to thank the Group's
management and staff for their hard work and commitment throughout the year.

Outlook

The Group has excellent technology, delivers highly regarded services and enjoys strong
relationships with major Hollywood studios. From
this base we intend to build a strong and profitable business.

Our patented technologies and innovative ideas give our clients potential for significant
cost savings and greater speed to market. We
continue to work closely with our clients to develop future tools and we have a number of new
products in the pipeline. We are very excited
by the opportunities around the Blu-ray platform and continue to invest in research and
development.

The current financial year has started well with technology sales showing a significant
increase over the same period in the previous
year. Scope Seven continues to build its client base. As a Group we have been pleased to
achieve a trading profit for the first five months
of the new financial year. We will update the market further on current trading at ZOO's AGM
on 6 October 2008.

[aphzombie] 03/9/2008 18:01

have been itching to find out how much ScreenLife was purchased for.



rumour from the above report is that viacom paid "less than $100 million" for ScreenLife. possibly then that suggests more than, say, $75 million? Possibly, then, a sum of £40+ million sterling.

And Zoo Digital Group 'sold' their dvd games division Zoo Interactive Video to one of their Directors for the grand sum of £200k ... which folded a year later leaving £175k of that fee unpaid (together with £40,000 of unpaid license fees).

hmmmm ....

[aphzombie] 03/9/2008 16:49

Uz,

screenlife are effectively only into dvd games (and even then they are mainly dvd board games rather than pure dvd tv) which they have recently ported to video consoles and mobile. what's interesting is that i can't think what screenlife actually bring to the deal, other than the "scene-it?" brand name. all the ip is bought-in via license from various studios, and their "optrieve" technology is (as far as i am aware) basically just a randomization tool bolted on to standard authoring kit/techniques.

don't remember zoo having any big dealings with paramount on dvd games side. the deepest relationships zoo have in this area appears to be Disney and Warner Bros. (studio-wise) plus Mattel and Hasbro/parker Bros. (toy manufacturers-wise). Hence the likes of upcoming titles such as Scooby Doo Funland of Freaky Frights, new CSI game, (presumably) new Hannah Montana and High school Musical dvd games direct from Disney (which have noticed as regionalised/localized for UK markets and now appear on UK play.com aswell as US stateside release). hasbro are also apparently slated to release a star wars clone wars game and scope7 also show Transformers dvd game on their website which was also apparently for Hasbro. Indiana Jones was another recent Hasbro release.

as for this deal pointing towards a possible polarization of providers to the studios .... i was wondering the same thing. Zoo's Scope7 are certainly seen as the number one provider of services to the studios in this sector, which is why i thought it was at least encouraging to see enough interest from another mega corporation such as viacom to actually purchase their own services provider in this space.

[uzbekking44] 03/9/2008 15:43

Screenlife purchase interesting. I have been off the pulse of ZOO for a while now but have the following questions:

Were Paramont & Viacom not ZOO clients?

What does the purchase of Screenlife by Paramount & Viacom mean for any current or future dealings with ZOO?

Does the strength of the Disney/Sony and ZOO relationship and the above deal augre towards a polarisation of providers to the studios?

[deanroberthunt] 03/9/2008 12:34

only sell 1.5k!!....every sell will hit the bid.

[deanroberthunt] 03/9/2008 12:29

any chance they could be a tad more specific, mid or end?

[uknighted] 03/9/2008 12:01

Just a reminder:

uknighted - 5 Aug'08 - 17:08 - 5083 of 5344 edit


I have emailed ZDG and they say they are looking to release the results "sometime in September".
Regards
UK

[aphzombie] 03/9/2008 11:46

ah right, ok. then probably also need to add up to 2.27M further shares from recent blocklisting aswell, if calculating current valuation on future possible happenings.

btw where does current £1.2M cash come from? last announcement was that cash stood at $1.3M (say £650-£700k). have noted their statement that recent deals plus cost rationalisation programme was "expected to preserve cash to extent of $2.4M" (say £1.2M) but had that clarified to me that this was further to existing cash.

i had guestimated this consisted roughly £700k ($1.4M) in up-front payments for MAT (Disney) and TAS (Sony) with further annualised savings of approx. £500k from cost rationalisation programme (ie. just cost saving rather than incoming cash). all this would presumably be subject to extent of cash-burn on ongoing activities, hence very difficult to calculate actual current cash position with any accuracy.

presumably this will be clarified in upcoming results / statement (if they ever get round to it).

[siwel100] 03/9/2008 11:18

APHZOMBIE....£2.5m share price plus the £2m convertible loan. I always work on market valuation rather than sp, its gives a more accurate picture, add debt or deduct cashpiles from share price Actually you could deduct the £1.2m cash from my figure, although its probably best to treat it as working capital until we get the move to cashflow positive.