Zoo Digital Share Discussion Threads

[radarlove] 26/6/2009 23:22

Funny what you discover after coming back from the pub!





deanroberthunt,

You talk like someone who has recently gone short on ZOO. :o)

[deanroberthunt] 26/6/2009 11:49

radarlove...turnover is vanity, profit is sanity....i've worked for a number of small firms that have doubled and trebled sales, but still gone belly up, cos they couldn't control costs

[aphzombie] 25/6/2009 22:50

some decent big names listed as ZOO services customers though ...

DISNEY
UNIVERSAL
20th CENTURY FOX
WARNER BROS.
MATTEL
HBO
BBC
NATIONAL GEOGRAPHIC
SHOWTIME

[deanroberthunt] 25/6/2009 18:14

simples...they need to increase margins by either increasing prices or reducing overheads, or both.....pointless runniung a business with a 0% or worse margin, might as well just call it a charity.

[aphzombie] 24/6/2009 13:51

my sentiments entirely ... can't help but question the business fundamentals without 'lucking in' on a period of very, very favourable xr.

have zoo (i) priced themselves too low, (ii) still got o/h too high, (iii) found themselves working to very very tight margins ..... or a combination of all three perhaps?

[deanroberthunt] 24/6/2009 12:19

yep, all the profit was due to XR......so still a long way to go...a bit worrying that they can't make a profit on nearly 7m t/o

[magnetincognito] 24/6/2009 12:11

APHZOMBIE: that seems quite feasible when you read this:

During the year ended 31 March 2009 there was much volatility in the US dollar with the rate peaking at 2.0038 and
falling to a low of 1.3631. If Sterling had remained at its highest level throughout the full year the group would have shown a post tax loss of £2.1million (2008: Loss £2.1m) and if Sterling
had been at its lowest level throughout the full year the group would have shown a post tax profit of £1.3million (2008: Loss £396,000). The main impact is on the translation of the
intercompany balances between subsidiary undertakings. The company has less transactions denominated in US dollars. The transactions for the company which are in US dollars are
with it's overseas subsidiaries.
In September 2006 the company issued £3,541,000 Unsecured convertible redeemable loan stock, redeemable on 31 October 2011. The loan carries a fixed interest rate of 6%. The
group also holds a promissory note repayable in quarterly instalments of $60,000 to Scenewise Inc. The promissory note, with a current balance of £172,000 (2008:£286,000), will be fully
repaid on 31 December 2009 and carries an interest rate of 10%. During the year the company also obtained a loan from South Yorkshire investment fund, this loan was fully repaid on
15th May 2009. The group and company consider the interest rate risk on the loans to be minimal as rates are fixed.
During the year ending 31 March 2009 due to volatility in the US dollar rate exposure of the group and company was more significant than in previous years

[aphzombie] 24/6/2009 08:28

house broker finncap however forecast an underlying loss of £100k for this coming year to march 2010 ...

[siwel100] 23/6/2009 15:26

radarlove....re-read the results.."After finance costs and an exceptional write-off of intangibles". Next year will not have either the finance costs or write-off. Given the current rate of organic growth, the £1m profit is a low target even without further news.
The only question mark is the exchange rate, personally I see the £ struggling to retain $1.40 to the £ over the next 9 months. If anything it is very likely we will get an even larger currency boost on next finals.
imo.

[jacobjohn7] 23/6/2009 12:52

they know whats in pipeline at zoo, and based on this look forward to increasing turnover and profit this year, I would say there is news in pipeline, more or less certain of new product announcement to add to reportoire, and sell to disney (and its seperate core businesses.. in effect like selling to four companies in one go), then there is the unquantifiable new links the individual software tools will register.. with MAT, looking like the one that will easiest pull in new customers, as it covers the whole of business and not just dvd/entertainment related.

[deanroberthunt] 23/6/2009 12:06

I agree, this time next year should see a much higher share price ..assuminmg the wheels don't fall off.....don't expect much from now till Xmas.

[siwel100] 23/6/2009 11:20

jacobjohn7...Need just a little bit more patience, it will hit the radar at half year. Will bobble a bit till then. The real gains will be from half year to next full year results (fully expect £1m+ profit)which puts ZOO on a forward PE 1 (excl. cash at that point) and the potential for an easy share price of 50p+ .
imo

[jacobjohn7] 23/6/2009 08:29

cheers radar, zoo will be on a few monitors now, expect to see SOME movement at some stage today.

[jacobjohn7] 22/6/2009 15:14

well done zoo, I look forward to seeing a steady rise in th SP, 20p plus by end of week IMHO. And then stabalise around that region I would suggest until we have further news. but I feel we wont have to wait long for this, as I think a new product announcement is just round the corner.

[radarlove] 22/6/2009 15:11

The reason why I've made a recent investment in ZOO is because, in my view, the company have finally turned a corner and we should see a steady rise in turnover and profit. Judging by the enthusiastic comments in the results, the management seem both relieved and delighted with the present progress.

For the share price to rise up to 30p and beyond, I would suggest there needs to be a) an upturn from the present becalmed AIM market b) continued recovery in the world economy c)further positive news from ZOO.

This is not a short term investment and patience is the watchword. With criminal spreads and disillusionment from investors nursing burnt fingers while selling out at any significant share price rise, it may take awhile for ZOO to climb the share price ladder. One hopes that by the end of the year, the share price may be riding the heights that some would like to see now.

We shall see.

[uzbekking44] 22/6/2009 10:49

The share price should at least have the Sept update figs already priced in.

I'm not sure we are going to get any headline contract rns in the near term. ZOO seem to have be focusing on increasing the usage of its product portfolio into its existing customer business units. With the technology proven and relationships forged this should be an easy sell at low cost.

New applications in development will have an established and receptive market to sell in to. An Rns detailing a new Tool would certainly enhance the value of the company further.

My previous concerns regarding the cash position seem largely unfounded. The exchange rate will still remain a significant factor however.

[uzbekking44] 22/6/2009 10:26

TIDMZOO

RNS Number : 2355U
Zoo Digital Group PLC
22 June 2009

?
ZOO DIGITAL GROUP PLC
('ZOO' or 'the Group')




PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2009




ZOO Digital Group plc (AIM: ZOO) is a provider of creative media services and
software for the film industry. It works with film studios to deliver creative
media for printed materials and audio-visual content. Its market-leading
proprietary software offers media companies considerable cost savings and
reduces time to market for home entertainment products, such as DVD, Blu-ray,
Video on Demand, interactive games and broadcast.


Financial Highlights
* Revenue up 100% to GBP6.6m (2008: GBP3.3m)
* Operating profit GBP0.5m (2008: loss of GBP1.9m)
* Maiden full year EBITDA profit of GBP1.3m (2008: loss of GBP1.4m), including
GBP1.4m from favourable exchange translation
* Profit before tax of GBP0.2m (2008: loss of GBP1.9m)
* Basic earnings per share were 0.95p compared to a loss of 15.7p in 2008
* Cash at year end of GBP1.0m (2008: GBP0.7m) and a new GBP0.5m overdraft secured
* Cash from operations of GBP1.0m (2008: cash outflow of GBP1.9m)
* Encouraging start to current year with a strong pipeline of work



Operational Highlights
* Strong organic growth with major Hollywood film studios
* Greater depth in relationships has allowed ZOO to offer a broader spread of
revenue enhancing services
* Key Hollywood studio now processes 80% of new DVD products using ZOO's software
* Benefited from a change in consumer habits caused by the global recession,
leading to a need for studios to reduce production costs and the time taken to
release a film on DVD



Stuart Green, CEO of ZOO Digital, commented, "These are good results and
demonstrate that our focus on providing quality products and service to our
major customers, the Hollywood studios, is bearing fruit. There is an increasing
focus among our customers on efficiencies and cost savings and I am confident
that we will continue to grow profitability in 2009."




For further enquiries please contact:


+------------------------------------------------+-------------------------+
| ZOO Digital Group plc | Tel: [phone] |
+------------------------------------------------+-------------------------+
| Stuart Green - Chief Executive Officer | |
+------------------------------------------------+-------------------------+
| Helen Gilder - Group Finance Director | |
+------------------------------------------------+-------------------------+
| | |
+------------------------------------------------+-------------------------+
| FinnCap | Tel: [phone] |
+------------------------------------------------+-------------------------+
| Marc Young / Charles Cunningham | |
+------------------------------------------------+-------------------------+
| | |
+------------------------------------------------+-------------------------+
| Weber Shandwick Financial | Tel: [phone] |
+------------------------------------------------+-------------------------+
| Terry Garrett / Nick Dibden / John Moriarty / | |
| Katie Matthews | |
+------------------------------------------------+-------------------------+


Chairman and Chief Executive Statement


The year to 31 March 2009 showed a strong performance by ZOO and represents a
fulfilment of our stated business development strategy which will continue to
drive our growth in the future. The execution of this strategy has enabled the
Company to report a doubling in revenues year-on-year and its first ever full
year EBITDA profit: GBP1.3m compared to a loss of GBP1.4m for 2008. With
profitability comes a much more stable footing in the development of ZOO,
enabling the continued investment in our product set and a broadening of the
scope of our operations, giving us confidence in our continued growth.


This improvement was driven largely by significant organic growth from our
existing major customers, the Hollywood film studios, where our primary focus on
penetrating deeper and broader into their operations has continued to prove
successful. We have made good progress within the film studios by increasing
both the number of business units utilising our products and services and the
revenues from each business unit. As these customers are increasingly focused on
reducing production costs and maximising efficiencies, our products and service
offerings, which reduce time to market for our customers' products while
delivering significant cost savings, are increasingly attractive. This is a
trend that we expect to continue for the foreseeable future.


Financial Review


Sales for the year showed a significant improvement, increasing 100% to GBP6.6m
(2008: GBP3.3m). Particularly strong growth resulted from the increased usage of
our products by our existing customers together with adoption by additional
studio business units.


EBITDA profit of GBP1.3m reflected a GBP2.7m improvement over the prior year
(2008: loss of GBP1.4m). This progress was partially flattered by gains on
exchange translation of GBP1.4m but, nonetheless, the underlying result
demonstrated a significant accomplishment.


Operating profit was significantly higher than last year at GBP0.5m (2008: loss
of GBP1.9m). After finance costs and an exceptional write-off of intangibles,
this resulted in a profit before tax for the year of GBP0.2m (2008: loss of
GBP1.9m). The Group has significant tax losses brought forward and therefore is
not required to make any payment for corporation tax for the year ended 31 March
2009. This is expected to remain the case for the foreseeable future.


Basic earnings per share were 0.95p compared to a loss of 15.7p in 2008.


Our continued focus on cash management has been an important factor in our
significant improvement in performance. Net cash generated from operating
activities was GBP1.0m compared to a net cash outflow of GBP1.9m for the
corresponding period last year, leading to cash at the year end of GBP1.0m
compared with GBP0.7m in 2008. In addition, we have recently put in place a new
banking relationship with the Royal Bank of Scotland which gives us access to an
overdraft facility of GBP0.5m.


Market Overview


As stated at the time of our Trading Update on 8 April 2009, current trends
within the industry remain undoubtedly positive for our business model. The
challenges within the home entertainment market continue and these largely
relate to the wider pressures on consumer spending. As a result the film studios
are looking at more efficient methods of production, reducing the associated
spend and shortening the time to market of their products. Through the Group's
ability to develop and deploy automation solutions and workflow optimisations,
ZOO is able to save its customers a considerable amount of time and money.


The number of new products being developed by film studios for Blu-ray is still
rising and we believe, despite the current economic conditions, that this will
continue and give rise to greater opportunities to provide services for this
platform. In addition, as our customers continue to search for higher efficiency
and lower costs so our service offering becomes increasingly compelling.


Operational Review


The Group has delivered a particularly strong performance this year and it is
pleasing to see the efforts and investment beginning to achieve positive
results. Our relationships with the major Hollywood and other film studios are
continuing to strengthen.


Production and Creative Services


Our production and creative services division, formerly referred to as Scope
Seven which we acquired in August 2007, has seen significant growth in revenue.
Our work with one major studio has now expanded across four key business units
of Technical Services, Home Entertainment, Television and Theatrical whilst
positive discussions are being undertaken with a number of other business units
and studios. The services provided by this division are differentiated in the
market by the application of our unique software which is not available through
other service vendors. Many of the services we offer are more attractive in
terms of pricing and turn-around times compared with our competitors.


Media Adaptation


The Group's Media Adaptation Tool, which automates the process of producing
printed materials including product packaging, posters and marketing materials,
saw revenues increase by 224%. The tool has been enhanced for our key customers
who are driving this product into wider areas of their operations. This
capability is particularly relevant to the film studios and home entertainment
markets where original programmes are created and then adapted for many
languages and territories. We are witnessing an increasing need by our customers
to expand this capability into other areas such as programme titles and credits
which are often regionalised for international markets. Our sophisticated
product continues to offer significant competitive advantages over the
conventional approaches employed within the market and we have identified a
number of further applications for it in video production and website
development.


Video Title Authoring


The Group's Templated Authoring System, which provides automated authoring of
video-based content for industry standard formats, saw revenues increase 212% as
our customers commissioned additional templates and significantly increased the
volume of DVD titles processed by our system. Revenues from licensing of this
system scale in proportion to the number of titles that it is used to process.
The product's resilience and continued refinement is now proving hugely
successful in the provision of production services for major Hollywood studios
and has resulted in a key customer processing 80% of its new products using the
system. The patent-protected methods on which this system is based are available
exclusively through ZOO, a fact that has enabled us to continue to win business
from a number of incumbent vendors.


Menu Regionalisation


Our Menu Regionalisation Tool which automates the process of creating multi
language variants of home entertainment titles had another strong year and
produced record revenues. The benefits of this tool are becoming more apparent
to customers as they look to distribute content to new international markets in
an effort to increase sales. We expect significant growth in our menu production
services in the current year as well as in our licensing fees for this tool
which scale in proportion to the number of menus that it is used to process.


Interactive DVD


The decline in the interactive DVD market has continued and we do not envisage
any significant new products to be developed by British or European publishers
in the current year. As a consequence, for the year ahead we expect almost all
related revenues to be denominated in US dollars. Our technology continues to be
used to create interactive DVD titles for US-based publishers but we anticipate
revenues in this category to be lower than the equivalent period last year.
However, we expect that the growth in our core business will more than offset
the diminishing interactive DVD revenues.


New Product Development


Much progress has been made in the development of new technologies to support
our services for Blu-ray title production, video localization and web based
content. These are growing areas of our customers' operations so it is important
that ZOO is able to participate in this market.


We continue to innovate and are working on a number of new products that provide
automation and workflow optimisation solutions which we expect to announce in
the period ahead.


Sales and Marketing


Our sales pipeline with our major customers strengthened though the year, with
growth achieved across a number of different areas and penetration into an
increasing number of business units including television networks and home
entertainment. Through the broadening of the scope and service levels, the Group
secured significantly greater production work and this has resulted in larger
billings. The Group's technology is being used more widely across the industry
and ZOO is adapting its products for different end markets from video titles
through to printed materials, from standard definition DVD through to Blu-ray
Disc and from TV production through to internet download.


Our commercial efforts continue to be focused on securing new business in other
divisions of our existing studio customers, which can often be accomplished more
quickly than acquiring new clients, as well as growing the customer base.


Board Changes


On 15 June 2009, we were pleased to announce the appointment to the Board of
James Livingston as non-executive director in place of Matt Taylor. We would
like to thank Matt for the contribution he has made during the past three years
during which significant progress has been made. James is a portfolio manager at
Foresight Group, working with a number of other SMEs at Board level. He has a
first class degree from Cambridge University and has represented Great Britain
in the World Rowing Championships. We look forward to working with James
through the next exciting episode of ZOO's growth.


Staff


We would like to take this opportunity to thank all our staff. Our product
development team continues to innovate and work on a number of new technologies
and product enhancements that will further enhance ZOO's competitiveness and
profitability. Our production services teams continue to embrace the challenges
presented by the significant growth in our pipeline of work and provide
excellent services to our customers. The major developments achieved throughout
the year would not have been possible without everyone's commitment and drive.


Outlook


Current trends within the industry are undoubtedly positive for our business
model. Film studios are looking at more efficient methods of production,
reducing the associated spend and increasing the speed to market of their
products. ZOO's technology helps them to achieve these goals and therefore our
products and services are in strong demand.


Based on continued strong demand for ZOO's products and services, the Board
remains very positive about the opportunities for the Group and believes that
2009 will be another year of growth for our core business. Revenues are now
almost all denominated in US dollars and trading in the current year has started
well, with turnover improved over the same period in the previous year and
profits significantly higher when compared on a fixed currency basis. We look
forward to a successful outcome for the year as a whole and providing a further
update to the market at the time of our AGM on 16 September 2009.




+-------------------------------------+-------------------------------------+
| Dr C H B Honeyborne | Dr S A Green |
+-------------------------------------+-------------------------------------+
| Chairman | Chief Executive Officer |
+-------------------------------------+-------------------------------------+










+----------------------------------------------+--------+---------+----------+
| ZOO Digital Group plc | | | |
+----------------------------------------------+--------+---------+----------+
| Annual Report and Accounts 2009 | | | |
+----------------------------------------------+--------+---------+----------+
| CONSOLIDATED INCOME STATEMENT | | | |
+----------------------------------------------+--------+---------+----------+
| for the year ended 31 March 2009 | | | |
+----------------------------------------------+--------+---------+----------+
| | | 2009 | 2008 |
+----------------------------------------------+--------+---------+----------+
| | Note | GBP000 | GBP000 |
+----------------------------------------------+--------+---------+----------+
| Revenue | 5 | 6,567 | 3,264 |
+----------------------------------------------+--------+---------+----------+
| Cost of Sales | | (1,276) | (27) |
+----------------------------------------------+--------+---------+----------+
| Gross Profit | | 5,291 | 3,237 |
+----------------------------------------------+--------+---------+----------+
| Other operating income | 6 | 79 | 100 |
+----------------------------------------------+--------+---------+----------+
| Other operating expenses | | (4,046) | (4,711) |
+----------------------------------------------+--------+---------+----------+
| Profit/(Loss) | | 1,324 | (1,374) |
| before interest, tax, depreciation and | | | |
| amortisation | | | |
+----------------------------------------------+--------+---------+----------+
| Depreciation | | (248) | (152) |
+----------------------------------------------+--------+---------+----------+
| Amortisation and impairment | | (563) | (227) |
+----------------------------------------------+--------+---------+----------+
| Exceptional items | 17 | 35 | (175) |
+----------------------------------------------+--------+---------+----------+
| Total operating expenses | 9 | (4,822) | (5,265) |
+----------------------------------------------+--------+---------+----------+
| Operating Profit/(Loss) | | 548 | (1,928) |
+----------------------------------------------+--------+---------+----------+
| Finance income | 7 | 8 | 72 |
+----------------------------------------------+--------+---------+----------+
| Finance cost | 8 | (345) | (327) |
+----------------------------------------------+--------+---------+----------+
| Profit/(Loss) before taxation | | 211 | (2,183) |
+----------------------------------------------+--------+---------+----------+
| Tax on profit/(loss) | 13 | (26) | 135 |
+----------------------------------------------+--------+---------+----------+
| Profit/(Loss) for the year | | 185 | (2,048) |
+----------------------------------------------+--------+---------+----------+
| Continuing operations | | 185 | (1,837) |
+----------------------------------------------+--------+---------+----------+
| Discontinued operations | 16 | - | (211) |
+----------------------------------------------+--------+---------+----------+
| Profit/(Loss) for the year | | 185 | (2,048) |
+----------------------------------------------+--------+---------+----------+
| Attributable to equity holders of the parent | | 185 | (2,048) |
+----------------------------------------------+--------+---------+----------+
| Profit/(Loss) per share | 15 | | |
+----------------------------------------------+--------+---------+----------+
| - basic | | 0.95p | (15.72p) |
| | | | |
+----------------------------------------------+--------+---------+----------+
| - diluted | | 0.62p | (15.72p) |
| | | | |
+----------------------------------------------+--------+---------+----------+




+----------------------------------------------+--------+----------+----------+
| ZOO Digital Group plc | | | |
+----------------------------------------------+--------+----------+----------+
| Annual Report and Accounts 2009 | | | |
+----------------------------------------------+--------+----------+----------+
| CONSOLIDATED BALANCE SHEET | | | |
+----------------------------------------------+--------+----------+----------+
| as at 31 March 2009 | | | |
+----------------------------------------------+--------+----------+----------+
| | | 2009 | 2008 |
+----------------------------------------------+--------+----------+----------+
| | Note | GBP000 | GBP000 |
+----------------------------------------------+--------+----------+----------+
| ASSETS | | | |
+----------------------------------------------+--------+----------+----------+
| Non-Current Assets | | | |
+----------------------------------------------+--------+----------+----------+
| Property, plant and equipment | 18 | 528 | 567 |
+----------------------------------------------+--------+----------+----------+
| Intangible assets | 19 | 4,806 | 4,042 |
+----------------------------------------------+--------+----------+----------+
| | | 5,334 | 4,609 |
+----------------------------------------------+--------+----------+----------+
| Current Assets | | | |
+----------------------------------------------+--------+----------+----------+
| Inventories | 20 | - | 188 |
+----------------------------------------------+--------+----------+----------+
| Trade and other receivables | 21 | 1,452 | 1,238 |
+----------------------------------------------+--------+----------+----------+
| Current tax assets | 13 | - | 90 |
+----------------------------------------------+--------+----------+----------+
| Cash and cash equivalents | 22 | 989 | 675 |
+----------------------------------------------+--------+----------+----------+
| | | 2,441 | 2,191 |
+----------------------------------------------+--------+----------+----------+
| Total Assets | | 7,775 | 6,800 |
+----------------------------------------------+--------+----------+----------+
| LIABILITIES | | | |
+----------------------------------------------+--------+----------+----------+
| Current Liabilities | | | |
+----------------------------------------------+--------+----------+----------+
| Trade and other payables | 27 | (2,461) | (1,621) |
+----------------------------------------------+--------+----------+----------+
| Borrowings | 26 | (366) | (270) |
+----------------------------------------------+--------+----------+----------+
| | | (2,827) | (1,891) |
+----------------------------------------------+--------+----------+----------+
| Non-current Liabilities | | | |
+----------------------------------------------+--------+----------+----------+
| Borrowings | 26 | (3,306) | (3,275) |
+----------------------------------------------+--------+----------+----------+
| Total Liabilities | | (6,133) | (5,166) |
+----------------------------------------------+--------+----------+----------+
| Net Assets | | 1,642 | 1,634 |
+----------------------------------------------+--------+----------+----------+
| EQUITY | | | |
+----------------------------------------------+--------+----------+----------+
| Equity attributable to equity holders of the | | | |
| parent | | | |
+----------------------------------------------+--------+----------+----------+
| Called up share capital | 23 | 3,199 | 2,687 |
+----------------------------------------------+--------+----------+----------+
| Share premium account | 23 | 23,012 | 23,030 |
+----------------------------------------------+--------+----------+----------+
| Other reserves | 25 | 8,598 | 8,598 |
+----------------------------------------------+--------+----------+----------+
| Share option reserve | 25 | 77 | 54 |
+----------------------------------------------+--------+----------+----------+
| Warrant reserve | 25 | 27 | - |
+----------------------------------------------+--------+----------+----------+
| Convertible loan note reserve | 25 | 266 | 266 |
+----------------------------------------------+--------+----------+----------+
| Foreign exchange translation reserve | 25 | (694) | 56 |
+----------------------------------------------+--------+----------+----------+
| Accumulated losses | 24 | (32,841) | (33,055) |
+----------------------------------------------+--------+----------+----------+
| | | 1,644 | 1,636 |
+----------------------------------------------+--------+----------+----------+
| Interest in own shares | 23 | (2) | (2) |
+----------------------------------------------+--------+----------+----------+
| Attributable to equity holders | | 1,642 | 1,634 |
+----------------------------------------------+--------+----------+----------+




+----------------------------------------------+--------+---------+---------+
| ZOO Digital Group plc | | | |
+----------------------------------------------+--------+---------+---------+
| Annual Report and Accounts 2009 | | | |
+----------------------------------------------+--------+---------+---------+
| CONSOLIDATED CASH FLOW STATEMENT | | | |
+----------------------------------------------+--------+---------+---------+
| for the year ended 31 March 2009 | | | |
+----------------------------------------------+--------+---------+---------+
| | | 2009 | 2008 |
+----------------------------------------------+--------+---------+---------+
| | Note | GBP000 | GBP000 |
+----------------------------------------------+--------+---------+---------+
| Cash flows from operating activities | | | |
+----------------------------------------------+--------+---------+---------+
| Operating profit/(loss) for the year | | 548 | (1,928) |
+----------------------------------------------+--------+---------+---------+
| Finance income | 7 | 8 | 72 |
+----------------------------------------------+--------+---------+---------+
| Depreciation | 18 | 248 | 152 |
+----------------------------------------------+--------+---------+---------+
| Amortisation & Impairment | 19 | 563 | 227 |
+----------------------------------------------+--------+---------+---------+
| Share based payments | 31 | 79 | (87) |
+----------------------------------------------+--------+---------+---------+
| Disposal of own shares | 23 | - | 74 |
+----------------------------------------------+--------+---------+---------+
| Disposal of intangible assets | 19 | - | 7 |
+----------------------------------------------+--------+---------+---------+
| Disposal of property, plant and equipment | 18 | 4 | 53 |
+----------------------------------------------+--------+---------+---------+
| Exchange gain on foreign operations | | (1,408) | - |
+----------------------------------------------+--------+---------+---------+
| Changes in working capital: | | | |
+----------------------------------------------+--------+---------+---------+
| Inventories | 20 | 188 | (188) |
+----------------------------------------------+--------+---------+---------+
| Trade and other receivables | 21 | 19 | 566 |
+----------------------------------------------+--------+---------+---------+
| Trade and other payables | 27 | 682 | (975) |
+----------------------------------------------+--------+---------+---------+
| Cash flow from operations | | 931 | (2,027) |
+----------------------------------------------+--------+---------+---------+
| Tax received | | 64 | 98 |
+----------------------------------------------+--------+---------+---------+
| Net cash flow from operating activities | | 995 | (1,929) |
+----------------------------------------------+--------+---------+---------+
| Investing Activities | | | |
+----------------------------------------------+--------+---------+---------+
| Acquisition of subsidiary | | - | (1,536) |
+----------------------------------------------+--------+---------+---------+
| Purchase of intangible assets | 19 | (643) | (310) |
+----------------------------------------------+--------+---------+---------+
| Purchase of property, plant and equipment | 18 | (89) | (2) |
+----------------------------------------------+--------+---------+---------+
| Net cash flow from investing activities | | (732) | (1,848) |
+----------------------------------------------+--------+---------+---------+
| Cash flows from financing activities | | | |
+----------------------------------------------+--------+---------+---------+
| Repayment of borrowings | 26 | (318) | (10) |
+----------------------------------------------+--------+---------+---------+
| Proceeds from borrowings | 26 | 75 | - |
+----------------------------------------------+--------+---------+---------+
| Finance cost | | (250) | (232) |
+----------------------------------------------+--------+---------+---------+
| Share and convertible loan issues | 23 | (18) | (272) |
+----------------------------------------------+--------+---------+---------+
| Issue of Share capital | 23 | 512 | 3,000 |
+----------------------------------------------+--------+---------+---------+
| Net cashflow from financing | | 1 | 2,486 |
+----------------------------------------------+--------+---------+---------+
| Net increase/(decrease) in cash and cash | | 264 | (1,291) |
| equivalents | | | |
+----------------------------------------------+--------+---------+---------+
| Cash and cash equivalents at the beginning | | 675 | 2,026 |
| of the year | | | |
+----------------------------------------------+--------+---------+---------+
| Exchange (loss)/gain on cash and cash | | 50 | (60) |
| equivalents | | | |
+----------------------------------------------+--------+---------+---------+
| Cash and cash equivalents at the end of the | 22 | 989 | 675 |
| year | | | |
+----------------------------------------------+--------+---------+---------+




+----------------------------------------------+--------+--------+---------+
| ZOO Digital Group plc | | | |
+----------------------------------------------+--------+--------+---------+
| Annual Report and Accounts 2009 | | | |
+----------------------------------------------+--------+--------+---------+
| CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE | |
+----------------------------------------------------------------+---------+
| for the year ended 31 March 2009 | | | |
+----------------------------------------------+--------+--------+---------+
| | | 2009 | 2008 |
+----------------------------------------------+--------+--------+---------+
| | | GBP000 | GBP000 |
+----------------------------------------------+--------+--------+---------+
| Exchange difference on the translation of | | (750) | (26) |
| foreign operations | | | |
+----------------------------------------------+--------+--------+---------+
| Net (expense)/ income recognised directly in | | (750) | (26) |
| equity | | | |
+----------------------------------------------+--------+--------+---------+
| Profit/(loss) for the financial year | | 185 | (2,048) |
+----------------------------------------------+--------+--------+---------+
| Total recognised expense for the year | | (565) | (2,074) |
+----------------------------------------------+--------+--------+---------+
| Attributable to equity holders of the | | (565) | (2,074) |
| company | | | |
+----------------------------------------------+--------+--------+---------+


ZOO Digital Group plc
Annual Report and Accounts 2009


NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2009


1. General Information


ZOO Digital Group plc ('the company') and its subsidiaries (together 'the
group') provide productivity tools and services for the video post-production,
pre-media and interactive markets and continue with ongoing research and
development in those areas. The group has operations in both the UK and US.


The company is a public limited company which is listed on the Alternative
Investment Market and is incorporated and domiciled in the UK. The address of
the registered office is The Tower, 2 Furnival Square, Sheffield.


The registered number of the company is 3858881


2. Summary of significant accounting policies


The principal accounting policies applied in the preparation of these financial
statements are set out below. These policies have been applied consistently to
all the years presented, unless otherwise stated.


2.1 Basis of preparation
These financial statements have been prepared in accordance with IFRS as adopted
by the European Union, and with those parts of the Companies Act 1985 applicable
to companies reporting under IFRS.


The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that effect the
application of policies and reported amounts in the financial statements. The
areas involving a higher degree of judgements or complexity, or areas where
assumptions or estimates are significant to the financial statements are
disclosed in note 3.


A separate income statement for the parent company has not been presented as
permitted by section 230 (4) of the Companies Act 1985.


The directors have prepared trading and cash flow forecasts for the group for
the period to 31 March 2012. Recent months sales figures have shown increases in
the group's sales to its existing customers, and an encouraging roll out of
products to new customers. The forecasts assume, inter alia, that sales of
existing products to existing and new customers will continue to increase, and
the directors have had informal indications from customers to substantiate a
significant proportion of the forecast increased sales.


The directors have considered the consequences if the increase in sales volume
is less than the level forecast. The directors are confident that in this
eventuality alternative steps could be taken to ensure that the group can
continue to operate without the need for additional funding.


The directors believe these assumptions to be realistic, and consequently that
the group will continue in operational existence for the foreseeable future. The
financial statements have therefore been prepared on a going concern basis.


2.1.1 EU adopted IFRS not yet applied


The following IFRS was available for early adoption but has not yet been applied
by the group in these financial statements:
* IFRS 8 Operating Segments for years commencing on or after 1 January 2009.

The application of IFRS 8 in the year ended 31 March 2009 would not have
affected the balance sheet or income statement as the standard is concerned only
with disclosure.


2.2 Consolidation


Subsidiaries are all entities over which the group has the power to govern the
financial and operating policies so as to obtain benefit from their activities.
Subsidiaries are fully consolidated from the date on which control is
transferred until the date that control ceases.


The consolidated financial statements of ZOO Digital Group plc include the
results of the Company and its subsidiaries. Subsidiary accounting policies are
amended where necessary to ensure consistency within the Group and intra group
transactions are eliminated on consolidation.


2.3 Segment reporting


A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and returns that are different from those of segments operating
in other economic environments.


2.4 Foreign currency translation


2.4.1 Functional and presentation currency


Items included in the financial statements of each of the group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in sterling which is the company's functional and
presentation currency.


2.4.2 Transactions and balances


Transactions in foreign currencies are recorded at the prevailing rate of
exchange in the month of the transaction. Foreign exchange gains or losses
resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at the year
end exchange rates are recognised in the income statement.


2.4.3 Group companies


The results and financial position of all group entities that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:


* assets and liabilities for each entity are translated at the closing rate at the
balance sheet date;
* income and expenses for each income statement are translated at the prevailing
monthly exchange rate for the month in which the income or expense arose and all
resulting exchange rate differences are recognised with the foreign exchange
translation reserve.



2.5 Intangible assets


2.5.1 Goodwill


Goodwill arising on the acquisition of subsidiary undertakings and businesses,
representing any excess of the fair value of the consideration given over the
fair value of the identifiable assets and liabilities acquired, is capitalised
and reviewed annually for impairment. Goodwill is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are not reversed.


Goodwill is allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units that are expected
to benefit from the business combination in which the goodwill arose.


2.5.2 Patent and Trademark costs


Patent and trademark costs are stated at cost, net of amortisation and any
provision for impairment. Patents and trademarks have a finite useful life and
amortisation is charged on a straight line basis over the estimated useful
economic life (10 years).


2.5.3 Research and Development costs


Research expenditure is charged to the income statement in the period in which
it is incurred. Development costs are recognised as an intangible asset if they
fulfil the following criteria:


* it is technically feasible to complete the intangible asset so that it will be
available for use;
* management intends to complete the intangible asset and use or sell it;
* there is an ability to use or sell the intangible asset;
* it can be demonstrated how the intangible asset will generate probable future
economic benefits;
* there are adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset;
* the expenditure attributable to the intangible asset during its development can
be reliably measured.



Other development expenditures that do not meet these criteria are recognised as
an expense as incurred. Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.


Development costs recognised as an intangible asset are amortised on a straight
line basis over 3 years or the length of any current sales contracts, from the
point at which the asset is ready for sale or use.


2.5.4 Computer Software


Acquired computer software is shown at historical cost less accumulated
amortisation and impairment losses. Amortisation is charged to the income
statement on a straight-line basis over 3 years from the date the asset is
available for use.


Costs that are directly associated with the development of identifiable and
unique software products controlled by the group, and are expected to generate
economic benefits exceeding costs beyond one year, are recognised as development
costs within intangible assets. See note 2.5.3 Research and Development costs.


2.6 Investments in subsidiary undertakings


In the company, Investments in subsidiary undertakings are carried at cost less
any impairment. The investments are reviewed on an annual basis to test for any
indication of impairment. The investments are eliminated on consolidation.


2.7 Property, plant and equipment


All property, plant and equipment assets are stated at cost less accumulated
depreciation and impairment. Depreciation is provided on all such assets at
rates calculated to write off the cost of each asset less estimated residual
value, on a straight-line basis, over its expected useful life, as follows:


+--------------------------------+----------------------------+
| Leasehold improvements | 5 years or over the term |
| | of the lease, if shorter |
| | |
+--------------------------------+----------------------------+
| Computer hardware | between 2 and 3 years |
| | |
+--------------------------------+----------------------------+
| Office equipment, fixtures | between 2 and 5 years |
| and fittings | |
+--------------------------------+----------------------------+




2.8 Impairment of assets


The group assesses at each balance sheet date whether there is any indication
that any of its assets have been impaired. If such indication exists, the
asset's recoverable amount is estimated and compared to its carrying value.


For goodwill, intangible assets that have an indefinite life and intangible
assets not yet available for use, the recoverable amount is estimated at each
balance sheet date and whenever there is an indication of impairment an
impairment loss is recognised for the amount by which the asset's carrying value
amount exceeds its recoverable amount. Impairment losses are recognised in the
income statement.


2.9 Financial Instruments


The group classifies financial instruments, or their component parts, on initial
recognition as a financial asset, a financial liability or an equity instrument
in accordance with the substance of the contractual agreement.


Financial instruments are recognised on the balance sheet at fair value when the
group becomes a party to the contractual provisions of the instrument.


2.9.1 Borrowings


Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the
effective interest rate method.


The convertible loan notes are accounted for in accordance with IAS 32
'Financial Instruments:presentation' and split between debt and equity based
upon the market rate of similar loans not carrying conversion options.


2.9.2 Trade receivables


Trade receivables are stated at their amortised cost as reduced by appropriate
allowances for estimated irrecoverable amounts. They are recognised on the trade
date of the related transactions. Subsequent recoveries of amounts previously
written off are credited to the income statement.


2.9.3 Cash and cash equivalents


Cash and cash equivalents include cash in hand and deposits held at call with
banks.


2.9.4 Trade payables


Trade payables are stated at their amortised cost. They are recognised on the
trade date of the related transactions.


2.10 Share based payments


Options are measured at fair value at grant date using the binomial model. The
fair value is expensed on a straight line basis over the vesting period, based
on an estimate of the number of options that will eventually vest


Under the group's share option scheme, share options are granted to directors
and selected employees. The options are expensed in the period over which the
share based payment vests. A corresponding increase to the share option reserve
under shareholder's funds is recognised. When share options are exercised, or
when share options are forfeited, cancelled or expire, the corresponding fair
value is transferred to the accumulated losses reserve. The group has no legal
or constructive obligation to repurchase or settle the options in cash.


2.11 Pension costs and other post retirement benefits


The Group operates only defined contribution schemes and pays contributions to
publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. The group has no further obligations once the
contributions have been paid. The amount charged to the income statement in
respect of pension costs and other post-retirement benefits is the contributions
payable in the period. Differences between contributions payable in the period
and contributions actually paid are shown as either accruals or prepayments in
the balance sheet.


2.12 Revenue


Revenue comprises the consideration receivable for services provided, software
usage fees and royalty income. Revenue is shown net of value added tax, returns,
rebates and discounts and after eliminating sales within the group.


2.12.1 Sales of services


The group sells design, development and other services relating to the DVD
production industry. These services are provided either on a time and material
basis or as a fixed price contract.


Revenue from time and material contracts is recognised as labour hours and
direct expenses are incurred, at the contracted rates.


Revenue from fixed price contracts is recognised in accordance with the
substance of the contract as services are performed by the group and accepted by
the customer.


If circumstances arise that may change the original estimates of revenue and
costs or extent of progress toward completion, estimates are revised. These
revisions resulting in increases or decreases in the estimated revenues and
costs are reflected in the income statement in the period in which the
circumstances that give rise to the revision become known to management.


2.12.2 Software usage fees


Revenue attributable to the use of software products is credited to the profit
and loss account in line with the usage of these products.


2.12.3 Royalty income


Under IAS 18 royalties are recognised on an accruals basis in accordance with
the substance of the relevant agreement. Based on the substance of the contract
agreements, revenue is recognised to match with estimated sales. Estimates of
expected sales are reviewed at each balance sheet date.


2.13 Inventories


Inventories are stated at the lower of cost and net realisable value. Cost
includes all direct costs incurred and attributable production overheads. Net
realisable value is based on estimated selling price allowing for all further
costs of completion and disposal.


Product development expenditure is carried forward to the extent that it is
considered to be recoverable. The amount carried forward is written off on
release over the expected sales life of each product.


2.14 Leases


Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under
operating leases are recognised in the income statement on a straight line basis
over the term of the lease


Leases of equipment where the group has substantially all the risks and rewards
of ownership are classified as finance leases. Finance leases are capitalised at
the lease's commencement at the lower of the fair value of the leased property
and the present value of the minimum lease payments.


Each lease payment is allocated between the liability and finance charges so as
to achieve a constant rate on the finance balance outstanding. The corresponding
rental obligations, net of finance charges, are included in other long-term
payables. The interest element of the finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The
equipment acquired under finance leases is depreciated over the shorter of the
useful life of the asset or the lease term.


2.15 Deferred taxation


Deferred tax, including UK corporation tax and foreign tax, is provided in full
using the balance sheet liability method. Deferred tax is the future tax
consequences of temporary differences between the carrying amounts and tax bases
of assets and liabilities shown on the balance sheet. Deferred tax assets and
liabilities are not recognised if they arise in the following situations; the
initial recognition of goodwill; or the initial recognition of assets and
liabilities that affect neither accounting nor taxable profit. The amount of
deferred tax provided is based on the expected manner of recovery or settlement
of the carrying amount of assets and liabilities, using tax rates enacted or
substantially enacted at the balance sheet date.


The group does not recognise deferred tax liabilities, or deferred tax assets,
on temporary differences associated with investments in subsidiaries, joint
ventures and associates as it is not considered probable that the temporary
differences will reverse in the foreseeable future.


A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. The carrying amount of deferred tax assets are reviewed at each
balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the asset to
be recovered.


2.16 Government grants


Grants from the government are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the group will comply
with all attached conditions.


Government grants relating to operating costs are deferred and recognised in the
income statement over the period necessary to match them with the costs they are
intended to compensate.


Government grants relating to property, plant and equipment are credited to the
cost of the asset and released to the income statement on a straight line basis
over the expected lives of the related assets.


2.17 Exceptional items


Exceptional items are those significant items which are separately disclosed by
virtue of their size or incidence to enable a full understanding of the group's
financial performance. Transactions which may give rise to exceptional items are
principally gains and losses on disposal of operations or restructuring
provisions.


3. Accounting estimates and judgements


Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.


3.1 Critical accounting estimates and assumptions


The group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.


Goodwill
Goodwill is tested annually for impairment at the balance sheet date. The
recoverable amounts of cash generating units have been estimated based on value
in use calculations. Value in use calculations have been based on a subjective
pre-tax discount rate of 8%. No impairment loss incurred at this discount rate.
Had the discount rate used been 1% greater or lower than estimated, there still
would be no impact on impairment.


Financial Instruments
Discounted cash flow analysis is used to determine the fair value of financial
instruments that are not traded on the open market. Calculations have been based
on a subjective pre-tax discount rate of 8%. Had the discount rate used been 1%
greater or lower than estimated, the in fair value would have been decreased by
GBP109,000, or increased by GBP115,000 respectively.


3.2 Critical judgements in applying the group's accounting policies


Operating lease commitments
The group has entered into property leases for its Sheffield and Los Angeles
offices. As management have determined that the group has not obtained
substantially all the risks and rewards of ownership of the property, the lease
has been classified as an operating lease and accounted for accordingly.


4. Segmental reporting


Primary reporting format - Business segments
At 31 March 2009, the group is organised on a worldwide basis into two main
business segments:
* Software solutions, through development and consultancy
* Media production and design



These divisions are the basis on which the group reports its primary segment
information. Other group operations comprise of head office operations.


The segment results are as follows:
+--------------------------+---------+---------+---------+---------+---------+---------+
| | Software | Media Production | Group |
| | Solutions | | |
+--------------------------+-------------------+-------------------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+--------------------------+---------+---------+---------+---------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Total Revenue | 3,675 | 2,038 | 4,384 | 1,710 | 8,059 | 3,748 |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Inter-segment revenue | (82) | (129) | (1,410) | (355) | (1,492) | (484) |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Revenue | 3,593 | 1,909 | 2,974 | 1,355 | 6,567 | 3,264 |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Segment result | 1,889 | (191) | (552) | (661) | 1,337 | (852) |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Unallocated corporate | | | | | (789) | (1,076) |
| expenses | | | | | | |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Operating profit/(loss) | | | | | 548 | (1,928) |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Finance income | | | | | 8 | 72 |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Finance cost | | | | | (345) | (327) |
+--------------------------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) before | | | | | 211 | (2,183) |
| taxation | | | | | | |
+--------------------------+---------+---

[deanroberthunt] 22/6/2009 09:12

results indicate that the company, finally, has turned things around, the foundations are set and operations stabilised..they now have decent cash levels, into profitability....now we just need some juicy contract wns to propel earnings......

hoping that xr remains favourable to ZOO for aty least the next 12mths to boost cash position further, to remove the constant spectre of placings....

definitely a minnow to watch from hereonin.

[pierre oreilly] 22/6/2009 08:35

Well done all the diehards here - I wonder if this surge will get Cash to post his thoughts?

[parvez] 22/6/2009 08:04

fantastic results...

[wywcu1] 22/6/2009 07:28

I will try and pick up a few more at 8am

[bodgit] 22/6/2009 07:14

cosh285, right so far! End June 30p? Lets see. FWIW, the results on first glance read very well. The only significant concern I have is dominance of dollar revenues and impact of changing exchange rates on Sterling revenues. Good luck all.