Zoo Digital Share Discussion Threads

[jacobjohn7] 26/11/2009 15:03

seen this for five years stoaty. But only now is the success in reach, and only tenuously based on cash in bank. Turning point as always is on increased deals.

[stoaty1] 26/11/2009 14:56

This is a growth stock with R&D expenditure disproportinate to t/o in early stages. The likely recent expenditure on the old films project will, no doubt bring in revenues going forward, plus they have received £350,000 by grant which was not in the figures.
Revenue up 31% is very good and future prospects look encouraging. If the market cap was twice what it is, then your slight negativity would be justified in my opinion.

[jacobjohn7] 26/11/2009 13:22

The £ to $ conversion issue, it was explained at the AGM has barely any impact on the actual business and balance sheet. APH should be able to explain this more clearly when he drops by.

[jacobjohn7] 26/11/2009 13:18

looking at this first six months sewil, we will need more deals on the table for new software to acheive the figures you have stated in the second half. Sadly to say, but we are again waiting for the deals that will turn this into a company with excellent products, into a profitable self sufficient company with excellent products.

[jacobjohn7] 26/11/2009 13:14

trouble is, and slightly catch 22 dean is that they seem to get carried away with R&D mainly as point of keeping up to speed with customer needs which is very understandable, but when we registered that there was a profit (however small) last year, the big help from the government with regard to R&D dries up, so the cross over in the time is difficult, cash situation does look precarious, especially considering second half isnt as lucrative as 1st half. And where does the house brokers get their figures from?
For these reasons i am out at present. If and when we have confirmation of this considerable interest in the software becoming firm, until then I feel we will drop back 30% ish, and sit around that area, until something happens either way.

[siwel100] 26/11/2009 13:09

deanroberthunt...Finals will give the more accurate picture. A few words but nothing concrete on 2nd half trading which was a shame. Mkt cap + debt gives a £10million valuation, which is a tad steep (even allowing for growth) unless they can hit the finals profit figure, absolute minimum £500k nett needed, preferably closer to the £1m.
Although I have no doubt that the £ will weaken against the $ next year, the relatively high current rate wont be adding bunce to current years finals.
imo

[jacobjohn7] 26/11/2009 08:28

statement is positive, but they have been positive for a few years now. Needs some more meat on the bones (another deal) for us to move onwards and upwards is my guess

[jacobjohn7] 26/11/2009 08:21

only probs i have negativity about is the cash balance, its a lot lower than I (and most people) anticipated (and house broker forecast of £3m at year end which is some way off), and thats dollars. So, that is my only big gripe at present.

I have decided to sit on the sidelines, as this could be fodder for the 'another placing' merchants. For once I have let my brain (+money and lack of it) rule over my heart, and will look to get back in when opportune time presents itself.
Good luck all.

[philjeans] 26/11/2009 08:02

Can't find any gremlins in there; full steam ahead!

[jacobjohn7] 26/11/2009 07:34

there are some good positives on customers evaluating new software, and new products that seem to be very far advanced for more revenue streams.

[bodgit] 26/11/2009 07:24

Quick read through of the text says to me 'very good progress' and clear confidence in the future. Good. Well done all at ZOO and fingers crossed for a positive share price response today - and in the future. I wonder when dividends will begin to flow? Good luck all.

[jacobjohn7] 26/11/2009 07:08

RNS Number : 1002D
Zoo Digital Group PLC
26 November 2009

?
26 November 2009
ZOO DIGITAL GROUP PLC
("ZOO" or "the Group")


INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2009


ZOO Digital Group plc, the provider of software and software-led services for
the filmed entertainment market, today announces its financial results for the
six months to 30 September 2009.


Financial Highlights


As announced at the Company's AGM, functional and presentation currency has
changed to US Dollars


* Revenues increased by 31% to $8.1 million (H1 2008: $6.2 million)

* *Profit of $0.4 million for the half year (H1 2008: loss of $0.5 million)

* Operating cash flow of $0.7 million (H1 2008: Nil)

* Cash balance at 30 September of $0.5 million



*before exchange differences on the translation of intercompany balances and
borrowings



Operational Highlights


* Launch of Translation Management System (TMS)

* Awarded Government funding for film and video restoration project





Stuart Green, CEO of ZOO Digital, commented:
"The Board has continued to focus on growing the recurring revenue streams, and
we are pleased to report significant progress in both of our key areas of
software licensing and value-added services. Our software products and staff are
becoming increasingly embedded within the operations of our major film studio
customers where we enjoy mutually beneficial working relationships.


"The filmed entertainment industry continues to face challenging economic
circumstances, which makes ZOO's time and cost-saving solutions even more
compelling, and we look forward to the future with confidence."




For further enquiries please contact:


+-------------------------------------------------+----------------------------+
| ZOO Digital Group plc | 0114 241 3700 |
+-------------------------------------------------+----------------------------+
| Stuart Green - Chief Executive Officer | |
+-------------------------------------------------+----------------------------+
| Helen Gilder - Group Finance Director | |
| | |
+-------------------------------------------------+----------------------------+
| FinnCap | 020 7600 1658 |
+-------------------------------------------------+----------------------------+
| Marc Young/ Charles Cunningham | |
| | |
+-------------------------------------------------+----------------------------+
| Threadneedle Communications | 020 7653 9850 |
+-------------------------------------------------+----------------------------+
| Graham Herring/Josh Royston | |
+-------------------------------------------------+----------------------------+





Chairman and Chief Executive's Statement


We are pleased to report that the six months ended 30 September 2009 represents
another period of growth for ZOO.


As announced at the Company's AGM in September, our functional and
presentational currencies have been changed to reflect that the most significant
proportion of our business is in the United States of America and transacted in
US dollars ("USD" or "$"). As such, our results are stated for the first time in
USD with historic results restated in accordance with International Financial
Reporting Standards ("IFRS"). The reported business performance has been
distorted by the necessary inclusion of exchange gains and losses on the
translation of certain balance sheet items that have no immediate cash impact.
Adjusting for these items shows the progress in the underlying business, where
revenue for the six months to 30 September 2009 increased to $8.1 million (six
months to 30 September 2008: $6.2 million) with profit before exchange
differences increasing to $0.4 million (2008: $0.5 million loss).


The Board has continued to focus on growing the recurring revenue streams, and
we are pleased to report significant progress in both of our key areas of
software licensing and value-added services. Our software is licensed under long
term agreements; in the case of one major client this period is for 15 years.


Our software products and staff are becoming increasingly embedded within the
operations of our major film studio customers where we enjoy mutually beneficial
working relationships. ZOO is analysing areas of studio operations that are
traditionally outsourced to service vendors, and identifying where there is
scope to automate and centralise workflows. Increasingly our engagement with
customers in these areas begins with us deploying our staff to provide
traditional production services, during which time we become familiar with the
precise details of the workflows and are quickly able to identify opportunities
where we can apply technology solutions. Equipped with this knowledge, we then
design, build and deploy sophisticated workflow automation software that
benefits our customers by simplifying their operations while reducing their
costs and time to market. In each case our software is licensed using a pricing
model that provides recurring revenues to ZOO, typically charged monthly based
on usage, which reduces production costs borne by our customers. Due to these
benefits, when our tools become embedded within our customers' operations their
usage, and therefore the corresponding revenue to ZOO, increases over time.


Whilst we continue to develop and enhance our suite of desktop application
software, we have recently launched the first of our web-based solutions,
enabling greater levels of collaborative working in studio operations. The
Translation Management System (TMS) allows users to enter translations and legal
information into an on-line database. This textual information is processed
using ZOO's integrated desktop tools and applied to multiple media, from DVD and
Blu-ray menus to marketing collateral such as posters and websites. The system
incorporates a number of modules, including a dictionary of standard
translations, as well as the capability to 'learn phrases' as they are used in
specific contexts. This eradicates the need for duplication, providing ZOO's
clients with significant cost savings, along with improved brand consistency and
control. There has been considerable interest in the system and it is currently
being evaluated by a number of clients.


With the addition of the TMS, we can offer a turn-key solution to any client
that requires localisation across multiple media forms. The combination of this
system with our desktop software allows wider participation in customer
processes, delivering significant cumulative benefits. We have other web-based
solutions in the pipeline and will be announcing further new developments in due
course.


We continue to invest in R&D and have recently announced a new initiative to
develop software solutions for the automated restoration of film and video
materials. This is an area where we have identified a significant annual spend
within major film studios and where current solutions depend heavily on highly
skilled manual labour. In a project anticipated to run for three years, we plan
to develop innovative new approaches that will be substantially automated,
enabling operators without specialist skills to process materials in less time
and at lower cost. We were pleased to announce that ZOO has received funding for
this project from the Technology Strategy Board, a public body established by
the British Government in 2007 to support technology-enabled innovation. We will
be working closely with a small consortium of partners that includes the British
Film Institute - the organisation established in 1933 to promote understanding
and appreciation of Britain's rich film and television heritage and culture.


Our patent portfolio continues to grow with 22 cases now granted in the US, UK
and other countries. We have recently received notice of allowance of a number
of patents that relate to copy protection of video content which we expect to
commercialise in the future.


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




Financial Review


In reporting our results in USD for the first time we have translated historic
results in accordance with IFRS by converting the reported pound sterling
("GBP") results into USD at the average rate in effect during the relevant
period.


Reported revenue for the period increased by 31% to $8.1 million (2008: $6.2
million).


We recognised exchange losses in the six month period to 30 September 2009 and
exchange gains in the year ended 31 March 2009 caused by the translation of
certain assets and liabilities which do not have any immediate cash impact or
any direct effect on our underlying business. Excluding these exchange
differences, we can see that the underlying business improved its performance
with a profit of $0.4 million compared to a loss of $0.5 million in the six
months to 30 September 2008.


The exchange losses reported in the current period relate to the fluctuating USD
value of the GBP3.5m convertible loan note and the gains in the previous year
relate to the translation differences on the internal loans between group
companies. After accounting for these exchange gains and losses, we report an
operating profit of $0.6 million (2008: $0.4 million), and a net loss for the
period of $0.2 million (2008: $0.1 million profit).


When we announced annual results in June 2009 we expected the interactive DVD
revenue to decline and for this shortfall to be offset by growth in our core
business. This has proved to be the case with interactive DVD revenue reducing
from $1.9 million to $0.5 million, which has been more than offset by increases
in our core business.


The cash generated from operating activities is $0.7 million (2008: Nil) leading
to a closing cash balance at 30 September 2009 of $0.5 million. In addition to
these cash reserves, we have an overdraft facility of GBP0.5 million in place
which is planned to aid the business in weathering the peaks and troughs of its
working capital cycle.




Outlook


The filmed entertainment industry continues to face challenging economic
circumstances that have prompted a range of cost cutting measures in studio
operations. With the on-going growth in video platforms, the public expects
greater choice in the way filmed content is enjoyed, which in turn presents
additional economic and production challenges to video producers and publishers.
ZOO's time and cost-saving solutions continue to be well received by our
customers as they offer a compelling investment case; we see further growth
potential within existing clients as well as from new customers. Unlike
traditional service providers that work with off-the-shelf technology, we are
well placed to deliver capacity for new customers since our solutions are highly
efficient and scalable.


While there is natural seasonality in a number of our revenue streams, mainly as
a greater proportion of the year's home entertainment titles are created during
the summer months ahead of the key Thanksgiving and Christmas buying periods,
our clients' marketing schedules continue to provide us with good revenue
visibility. These schedules give a snapshot of the likely future demand for our
software and services. Accordingly we anticipate significant throughput to
continue in the second half of the financial year.


We look forward to results for the full year to 31 March 2010 with confidence.

[chesty1] 25/11/2009 18:31

Good luck for tomorrow's results...

I hope it flies for all of you longs.

I will pop in & see how it reads.

No interest in buying, I have made a decent return out of ZOO & hold no grudge here, so I hope you all do very well from here.

Fully loaded elsewhere & cannot play here at all.

Be lucky to all & bring on the blue action for all you longs.

[jacobjohn7] 25/11/2009 18:02

you hinting at clints involvement bodg? ;o) I hope you are right, and we all have our days made (or years!)...

I think that it will show continued growth on the right side of profit/loss, with long contracts and deeper relationships, and most of the R&D done, then it should be onwards and upwards from here, be nice to see us move into other studios more. But as magnito said that the studios are criss crossed so much we are already in with them all.

[bodgit] 25/11/2009 17:43

jj7, indeed. I hope the news is good enough to 'make my day'. Good luck all.

[jacobjohn7] 25/11/2009 17:39

see you all tomorrow bright and early ;o)

[pierre oreilly] 23/11/2009 10:48

Sheesh, you lot are doing well, well done.

[jacobjohn7] 23/11/2009 10:22

yes, premium being asked for buying. And there are willing participants as I could sell quite a lot at 29.5p

[wywcu1] 23/11/2009 09:55

someone's bought 500 shares at 32p on plus.

[stoaty1] 23/11/2009 09:44

You are not wrong there jj !!! With a market cap of £6 million ,good figures, and more importantly,good prospects, could see the share price seriosly higher! Good luck all.

[jacobjohn7] 23/11/2009 09:41

come on guys, time to get giddy!

[jacobjohn7] 23/11/2009 09:17

back to scenario of any buy being alot higher than offer price. Dont think this will be the last move of the day.

[jacobjohn7] 22/11/2009 16:56

bodg, was talking mid. but know what you mean. all the best.