Zoo Digital Share Discussion Threads

[aphzombie] 12/12/2008 09:15

Latest from Yorkshire Post:

Zoo aims to benefit from home comforts

Zoo Digital, the hi-tech production company, is set to become one of the few recession winners as people stop going out and spend more on entertainment at home.


Sheffield-based Zoo's technology allows Hollywood studios to dramatically cut the cost of production and reduce the time a DVD disc takes to get to market.

"We are very well placed for the future," said Zoo's chief executive Dr Stuart Green. "The entertainment industry does best in times of recession. People stay in and watch DVDs rather than go to the pub. Studios will produce more titles which means more business for us."

He was speaking yesterday as the company announced its first ever pre-tax profit of £400,000 for the six months to September 30. Revenues rose 147 per cent to £3.24m, nearly equalling the amount for the whole of 2007.

Zoo is looking for further tie-ins with major Hollywood studios and the video game industry to drive its business in the coming year.

"We're working on deals with more of the major studios and we're talking to a number of businesses in the video game industry," said Dr Green. "Demand for our product in the current climate is high, with the studios looking at ways of saving money and getting their product to market faster than ever before."

The company has already struck deals with Walt Disney Studio Motion Pictures International, which will use its new Media Adaptation Tool (MAT), and Sony Pictures Entertainment.

The new MAT application is already proving a success, contributing 15 per cent of revenue generated in the period.

Dr Green said the group will be keeping a close watch on how Blu-ray, the next generation of home entertainment, performs over Christmas. "If it's successful this Christmas, the studios will produce more titles and more back catalogues," he said.

[mjcrockett] 12/12/2008 08:56

There is an update on ZOO's interims on Aimzine -

MJ

[wywcu1] 11/12/2008 15:40

Can't believe my luck, just picked up 50k at 11.25p.

[stoaty1] 11/12/2008 10:09

It will be interesting to see how they fare this quarter with chritmas , could be modestly cash generative.

[deanroberthunt] 11/12/2008 09:38

agreed....

[uzbekking44] 11/12/2008 09:33

Interesting set of results.
I can see these under pinning the share price. However, with the continuing high cost of developing the software the balance sheet continues to be pressured. It would seem that any profit is going to be consumed by the ongoing development costs short term unless more cash is raised.

The business seems more secure and the share price will reflect this. However, I can not see any reason for a dramatic rise. The business has a great deal more to prove.

[aphzombie] 11/12/2008 08:44

stunning new website, loads of new info ...

[plast] 11/12/2008 08:37

cosh ramping or what, im old hand and it wont fly im telling you.

[jacobjohn7] 11/12/2008 08:37

ta UK.
will move big style when we have confirmed further interest within any of zoos products markets. But seems we have something solid to build on.

[uknighted] 11/12/2008 08:20

JJ Shown as an exchange loss in the cash flow statement
Regards
UK

[jacobjohn7] 11/12/2008 08:13

Results of the strengthened dollar.. or weakened pound... not bad...

The strengthened dollar is beneficial to ZOO since the vast majority of our revenue is
arising out of the USA while Group overheads are
split between sterling and the dollar. In addition, in the first half of the year an exchange
rate gain of £372,000 has arisen through the
translation of intercompany balances denominated in dollars.

[jacobjohn7] 11/12/2008 08:11

11 December 2008
ZOO DIGITAL GROUP PLC
("ZOO" or "the Group")

INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2008

ZOO Digital Group plc, the creative media production and technology company, today
announces its financial results for the six months to
30 September 2008.

Operational highlights
* Significant uplift in revenues due to increased volume of new discs produced using
ZOO products
* New revenue streams initiated following introduction of a range of production
services that complement ZOO's proprietary software
* Excellent progress made by the recently launched Media Adaptation Tool with
opportunities to develop further to support a range of
new applications
* Further penetration of our product and service offerings into our key customers in
the home entertainment industry

Financial highlights
* First ever profit before interest, tax, depreciation and amortisation of £0.4m
(2007: Loss £0.6m)
* Revenue up 147% to £3.24m* (2007: £1.31m) virtually equal to the £3.26m announced
at the full year to 31 March 2008
* The recently launched Media Adaptation Tool already contributing 15% of revenue
generated in the period
* Cash position strengthened following October share placing raising £512,000

* includes £1.51m (2007: £0.24m) relating to the newly acquired Scope Seven

Stuart Green, CEO of ZOO Digital Group plc said "It has been our strategy to focus on the
major film studios and home entertainment
industry. By working closely with our customers we have been able to develop and refine our
offering and as a result we are delighted to be
reporting our first ever profit.

"We are finding that our fundamental offering of reducing costs and time to market is
proving very attractive in the current economic
environment to a wide variety of businesses, both inside and outside the entertainment
industry. We are confident that we now have the right
platform on which to continue building during the second half of the year."


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 / Katie Matthews



Chairman and Chief Executive Statement
We are pleased to report that we have made continued progress in the six months ended 30
September 2008 and ZOO's first ever profit. The
Group reported a profit (before interest, tax, depreciation and amortisation) of £0.4m
compared to a loss of £0.6m for the same period last
year. Revenues, including Scope Seven which was acquired in 2007, increased 147% to £3.24m
(2007: £1.31m) virtually equal to the £3.26m
announced at the preliminary results for the full year to 31 March 2008. Excluding the
acquisition, like-for-like software licensing
revenue, most of which is recurring, grew in the period by 83%.

This milestone has been achieved as a result of management's continued focus on our
principal customers, the major film studios, and in
broadening the Group's portfolio of products and services. ZOO's core technologies automate
the process of creating media products and
content, including DVDs, Blu-ray Discs and printed materials, and benefit customers through
reducing costs, providing greater economies of
scale and significantly increasing the speed to market of consumer products.

We put customer service at the top of our priorities, allowing us to deliver increasing
revenues from our existing customers by
providing high levels of service on long term contracts and helping us to attract new
customers to our business through referrals and
reputation.

Financial Review
Overall sales increased due to growth in usage of our software products which generates
recurring fees, and also expanded production
services which are increasingly used in conjunction with our proprietary software. This
combined offering means that the business can offer
a fully comprehensive, end-to-end proposition. This has enabled ZOO to move forward with new
business opportunities far more rapidly than
previously.

We have continued to control costs tightly in the period. Group overheads in the first
half of the year are higher than the previous
year due to the operating expenses of Scope Seven, acquired in August 2007.

The net cash outflow from operating activities in the half year was significantly reduced
to £5,000 compared to £795,000 in the same
period last year. The total cash outflow was £423,000 leaving a balance at 30 September 2008
of £240,000. Following the approval of the
placing at the Group's AGM on 6 October 2008 our cash position was strengthened by a further
£512,000.

The tax position of the Group remains strong with significant amounts of tax losses to
offset any taxable profits in both the UK and USA
and the availability of R&D tax credits.

The strengthened dollar is beneficial to ZOO since the vast majority of our revenue is
arising out of the USA while Group overheads are
split between sterling and the dollar. In addition, in the first half of the year an exchange
rate gain of £372,000 has arisen through the
translation of intercompany balances denominated in dollars.

Trading
We continue to grow our revenues generated by software licensing. The newest product, the
Media Adaptation Tool (MAT), is demonstrating
positive early signs. MAT automates the process of producing printed material such as posters,
packaging and marketing materials, and we
intend to develop this further as a platform for new products for the localisation of Blu-ray,
TV and web based content.

Revenues from the Templated Authoring System (TAS) have significantly increased due to
greater volumes of DVDs processed using the tool.
We are further encouraged that TAS is now often used in conjunction with our production
services.

In order to better reflect the combined service offering and the changed nature of our
business, Scope Seven, the production and
creative services company we acquired in 2007, has been rebranded under the ZOO Digital
banner. The team continues to provide consultancy,
creative and production services and we are benefiting from the strong relationships the team
has with the major film studios.

Our production group, which delivers a variety of finished media from Blu-ray through to
DVD discs, has performed strongly. In response
to increased customer demand for localised materials, we launched our specialist localisation
group earlier this year. This group uses our
proprietary software tools to produce fully finished printed and video materials for use in up
to 60 different territories. As we expand
this software platform we expect to broaden our offering to include other media.

Our creative group, which provides services to complement our production and software
licensing offerings, continues to work with a
number of the major content providers and produced excellent growth over the period.

Market
The global home entertainment industry is facing a number of important challenges in the
current economic climate, which is a situation
we believe will benefit ZOO. The studios are already exploring ways to reduce costs and
increase the speed to market of their products.
Currently most of the studios outsource the production of DVDs and printed items to third
parties, however, ZOO's solutions can
significantly reduce the cost of production by automating the process thereby removing the
need for highly skilled and expensive operators.


A further challenge the studios are facing is how to combat the threat of piracy which,
according to research conducted in 2005 by LEK
on behalf of the Motion Picture Association of America, cost the worldwide motion picture
industry $18.2 billion that year, of which $6.1
billion was attributed to the six major Hollywood studios. It is well known that a significant
proportion of fake product sales occur in the
period between a movie opening in theatres and its international release on disc and, as a
result, the studios are seriously committed to
ways of reducing that window of lost opportunity. We are confident that the products and
services ZOO provides will have a key role to play
in achieving this goal.

Staff
We are grateful to our excellent team of managers and staff who have delivered against our
strategic plan and enabled us to move the
business into profitable trading. The commitment to the customer and collaborative teamwork
are values that run throughout the organisation
and provide ZOO with great promise for the future.

Outlook
The Group's strategy of focusing on the major film studios and the home entertainment
industry is beginning to reap rewards. We are in a
strong position to benefit from the current economic environment which will encourage the
studios to take a closer look at their costs and
the opportunities presented on diversified platforms. In the second half of the financial year
management's emphasis will remain focused on
growing revenues and increasing profitability.

[deanroberthunt] 11/12/2008 08:10

still not "established"....but its on the right road.

[jacobjohn7] 11/12/2008 08:08

all the best all incredibly PATIENT holders.. had a few more this AM. I guess zoo are now at the end of the labour... hot towels please.

[uknighted] 11/12/2008 08:06

Opening 9% up.
Regards
UK

[cosh285] 11/12/2008 08:05

This is going to rocket boys. Any spare cash and I am buying into this story.

[deanroberthunt] 11/12/2008 08:03

Hindsight will advise if this is indeed the inflexion point of the J-Curve...or otherwise

[cosh285] 11/12/2008 07:43

Very soon people will realise that zoo is, arguably, one of the most exciting companies around and the share price will fly.

[deanroberthunt] 11/12/2008 07:26

if you compare this to the last set of results....well, its like a different company.

[deanroberthunt] 11/12/2008 07:22

the only negative is that the cash burn still seems to be a problem....having raised £512k only recently, half that seems to have gone already.

[deanroberthunt] 11/12/2008 07:12

these are the best bits imvho:

Market
The global home entertainment industry is facing a number of important challenges in the current economic climate, which is a situation
we believe will benefit ZOO. The studios are already exploring ways to reduce costs and increase the speed to market of their products.
Currently most of the studios outsource the production of DVDs and printed items to third parties, however, ZOO's solutions can significantly reduce the cost of production by automating the process thereby removing the need for highly skilled and expensive operators.

A further challenge the studios are facing is how to combat the threat of piracy which, according to research conducted in 2005 by LEK on behalf of the Motion Picture Association of America, cost the worldwide motion picture
industry $18.2 billion that year, of which $6.1 billion was attributed to the six major Hollywood studios. It is well known that a significant proportion of fake product sales occur in the period between a movie opening in theatres and its international release on disc and, as a result, the studios are seriously committed to
ways of reducing that window of lost opportunity. We are confident that the products and services ZOO provides will have a key role to play
in achieving this goal.

Outlook
The Group's strategy of focusing on the major film studios and the home entertainment industry is beginning to reap rewards. We are in a
strong position to benefit from the current economic environment which will encourage the studios to take a closer look at their costs and
the opportunities presented on diversified platforms. In the second half of the financial year management's emphasis will remain focused on growing revenues and increasing profitability.

[deanroberthunt] 11/12/2008 07:10

Couldn't ask for much better than that....and in this climate too....in fact, it seems bizzarly that ZOO'S outlook is improving with a worsening economy...partly due to the £/$ xr

£400k EBITDA....better than I had expected.

[bodgit] 11/12/2008 07:10

Well a quick scan of the results suggests that ZOO are at last becoming the cracking little business I hoped for way back. Well done ZOO. Hope the share price today reflects the positive progress made. Good luck all.