Zoo Digital Share Discussion Threads

[jacobjohn7] 27/11/2009 13:21

magneto, that is a clearer representation of results than zoos own RNS.
The scary bits that prompted my exit,ie:

Facts about actual loss where hidden amongst the report. (not in itself unusual)
The cash position was considerably lower than I anticipated.
None tied in with broker forecast.

This is the bit that says what has happened, but hidden amongst the currency conversion issue:
------------------------------------------------------------------------

Financial Review

...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).

--------------------------------------------------------

so in effect headlines should have read, zoo reveal $0.2m loss for first half!

I can only thank my spidey/zoo sense and getting my sale order in before market opened, and when the mm's used the old trick of ticking it up slightly at the start, to tie with distorted financial headline.
Until we have news of new customer revenue streams the balance is precarious IMO.

[magnetincognito] 27/11/2009 13:05

a bit of conflict on the profit/loss issue,

[jacobjohn7] 27/11/2009 12:31

there has been alot of spend on R&D historically, I even asked that question at the AGM, are there some spending restrictions on R&D in order to guarantee profits. The answer was that, yes they are contolled. But I suppose if you have got Disney saying we would like to be able do this, and then we will pay you for it as a service, then you are hardly not going to do it, as this the deeper penetration that they talk about... it sometimes feels that deeper penetration applies to the shareholders (me amongst them) who have lost 1000's over the last 5 years following the fortunes of zoo.

[deanroberthunt] 27/11/2009 12:11

It's simple, if they can't make a profit on circa $16.2m fy sales, then something is seriously wrong with their business model.....period

Its either the margins are non existent and/or they spending too much on Admimistration.

serial dissapointers.....and more jam tomorrow....
just when things seem to be on the turn.....oops there goes another rubber tree plant

[jacobjohn7] 27/11/2009 12:03

does someone have access to the house broker note... as that can't be right, especially with new ethos of under playing then over acheiving.

[dope007] 27/11/2009 11:56

Good old Zoo. Nothing changes

[jacobjohn7] 27/11/2009 11:54

the house broker has forecast something crazy like 3m (if my memory serves me right) cash position at end of this year... I want to know who provided that info, and where it has gone wrong, and/or spent.

[jacobjohn7] 27/11/2009 11:52

but that would be beneficial to the business, and the shareholders.

[jacobjohn7] 27/11/2009 11:52

im sure they dont fly out munching on lobster and quaffing champagne UZ.
But as I said, dont be surprised when it all goes out there, with just a satellite office in UK.

[uzbekking44] 27/11/2009 11:28

You can say that again John.
If my memeory serves me right, we have had 5 fundraisers since 2003 and the resultant dilution of holdings each time. Investors have been shafted time after time whilst the endless transatlantic business class flights continue.

Its time for economy class tickets and the Howard Johnson for the board.

[jacobjohn7] 27/11/2009 11:27

What is the actual profit for the period, or is it an actual net loss, which it reads like in certain paragraphs? If we have seen a profit, then surely we shouldnt be eating into cash reserves? I'm struggling to understand a few points with regard to these half year figures.

[jacobjohn7] 27/11/2009 08:37

quite a bit, unless they buy a 'day rover'.
The costs need to be 'and will be' covered by licence agreements for the various components of software.
The question that is on my mind is about the timescale to that point. As with the convertible loans, this company does not need any more shares in it.

[uzbekking44] 27/11/2009 07:13

ZOO will be utilising that overdraft facility fairly shortly one feels. Then there is the inevitable fundriaser to follow.

Costs seem to be too high imo.

I wonder how much ZOO executives spend on travel per year?

[jacobjohn7] 26/11/2009 22:11

everything seemed to be dropping into place with zoo, (and it is) but fast enough? is the question as usual. I had a figure in my mind that I thought they needed to acheive by half year, and this fell quite a bit short. And where has all the money gone from the bank? that was another big fright for me today, enough to sell. But conversely, I knew we would drop on those figures, as there was nothing stellar about them to keep the share price going. What will do this is more news on contract wins from any of the software angles. I will watch and wait for time being, we have seen zoo ticked down without remorse after almost every result, and I am not going to watch my current profits disappear another time. But have crystalised them with an eye what happens next.

[jacobjohn7] 26/11/2009 21:51

we need to invest on what the company can do with the products in the market place and acheive the required amount of profits generated from this (which needs to increase substantially to get the figures you have touted for full year), not rely, nay gamble on the currency markets to keep us afloat in the next few years, I used to think the currency conversion was a big plus, but have had it described in 'neutral' terms at the AGM.
Most of the business is now in the US, and I wouldnt be surprised if it all went over there in the next year or so. The full conversion to reporting in $ is the first step, all the Marketing and design is over there, alongside the lion share of other elements, with scope seven. In effect they are a US 'based' company now on AIM. I would be very surprised given zoos customer base being 95% U.S. if SG continued to peddle his wares from Sheffield via fortnightly flights to the U.S. to liaise with his customers, we have Doran over there, but the MD has to be seen and proactive to deal with. IMO.

[siwel100] 26/11/2009 18:51

jacobjohn...The £/$ conversion is actually the key to zoo

[siwel100] 26/11/2009 18:51

jacobjohn...The £/$ conversion is actually the key to zoo making a profit for the next few years (as they outlined in the last finals). A substantial chunk of their costs are currently in relatively expensive £'s, their income is in relatively cheap $'s.
They said themselves that if the £/$ conversion last year had remained at $2.10/£ then they would have posted a £1.3m loss instead of a £200k profit.
The ideal scenario would be for them to relocate R&D to the US or even cheaper India. Every body they add to UK research simply makes the situation more difficult.
Should the £ crumble next year against the $ then ZOO becomes an automatic buy simply on conversion gains.

[magnetincognito] 26/11/2009 15:33

i think i read somewhere the research grant is over a 3 year period so it will most likely be paid in stages,

[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