Zoo Digital Share Discussion Threads

[jacobjohn7] 01/12/2009 22:04

pork belly, been said before matey. They are hoping it doenst come to that, as the market wont put up with any more cash calls, it would all have to be funded loan wise again, this is part of the reason for the loss, as the loanees are all getting far more interest returns on their loans than they would elsewhere. Hence the loss that the shareholders are funding as usual.

[scotty1] 01/12/2009 15:36

Don't know if this been posted as not been following of late.

[jacobjohn7] 01/12/2009 10:24

well cash has gone down considerably, in what was a 'profitable' period of unprofitablility! Cosh, we have never gone up 8p in half hour never mind to 80p.
That has always been my thoughts on being out, but prepared to wait as there is weakness in the results and cash position, until something changes deal wise.

[pork belly] 01/12/2009 09:46

Today, Stuart Green says "the Group has no plans whatsoever to go back to the market for more cash." ( as "they have over $0.5 million in cash at present and also have an additional £0.5 million bank facility" )

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www.aimzine.co.uk
01 Dec 09

ZOO Digital

Interim results to 30 September were issued on 26 November. The results, being the first presented by ZOO in US Dollars, showed that revenue had grown by 31% to $8.1 million. The profit, before exchange rate differences, was $0.4 million compared to a loss of $0.5 million in the first half of 2008. This is good progress from ZOO but the weak dollar has meant that ZOO's £3.5 million convertible loan note has grown in value in dollar terms. Consequently there was an exchange rate loss of $615,000. After accounting for this the pre tax loss was $232,000.

The results statement was optimistic. We reproduce the Outlook section below:

'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.'

There was comment in the results statement to say that the Group had recently received notice of allowance of a number of US patents that relate to copy protection of video content which ZOO expect to commercialise in the future. I contacted Stuart Green to ask about these patents. Stuart told me that the patents had been applied for in 2003 and 2004 and it has taken until just recently for the US patents office to complete processing of the applications. Stuart did say that US patent applications are notoriously slow whereas the UK is much quicker with an average turn round time of approximately 2 years.

These particular US patents are for a facility to scramble DVD content in a way to make it more difficult to copy using 'ripping' software. The Group recognise that this facility could be very important to their clients. Having only just had their patent allowed, the Group are only at a very early stage in considering how to take this forward.

I also asked Stuart Green about ZOO's cash position and whether the Group plan to raise further cash. Stuart explained that they have over $0.5 million in cash at present and also have an additional £0.5 million bank facility should they require it. Consequently the Group has no plans whatsoever to go back to the market for more cash.

ZOO's next year end is 31 March 2010 and it is anticipated that the Group will issue a trading update at that time.

[dope007] 01/12/2009 09:42

So why didn't Zoo correct the broker at the time then? Typical Zoo!!!!

[cosh285] 01/12/2009 09:40

JJ. For what its worth, like you I have reduced my holding slightly after results. Disapointing not to see a 50p share price by year end but very much believe future is exciting for company but might take sometime yet.

On the other hand, having thought things through, having been a shareholder for 2/3 years I don't wish to reduce my holding too much to see company announce a significant contract and see shareprice go to 80p in 30 minutes.

If share price consolidates at around this price will certainly be looking to buy more in New Year.

[uknighted] 01/12/2009 07:34

Yes, JJ I would be buying again if the share price sinks to 15p level but for the moment I am happy to take the risks with my reduced holding.
Regards
UK

[jacobjohn7] 30/11/2009 21:25

well, looks that way, and will probably end up with more zoo shares for my sins! as I am generally 'pro' zoo's future, but not quite sure how much of a distant future now, and whether this future I expected will actually occur.

Was right about them saving a big drop till end of day... mm's can be so predictable... just keep ticking down as no buyers to take the sellers shares at this level, this might change round 15p level.

[uknighted] 30/11/2009 15:29

Hi JJ Sold half my holding on results day, had made a reasonable return on them, and sitting on the other half to see what the next 12 months brings.
I can understand you liquidating yours, hope it works out well for you.
Regards
UK

[jacobjohn7] 30/11/2009 15:06

long time no hear UK... whats your take on zoo at present?

[uknighted] 30/11/2009 15:04

RL
Thought I recognised your style, your aka Chirpychirpycheepcheep :-)
Regards
UK

[radarlove] 30/11/2009 14:46

Bodgit,

Yep, a regular question from other BBs.

Why the username? The track was my favourite to dance to when a youth. In fact, my various usernames are pop song titles from the 1970s. :o)

[jacobjohn7] 30/11/2009 14:25

they usually save a big drop till late in day....

[jacobjohn7] 30/11/2009 14:23

bodg, these quite severe fluctuations can be difference between banking a few grand or not, seen it, and not done it a few times in past, used my knowledge of the company and share price and know to read between lines, which has saved me some this time. Bit the bullet, and must have got best price on day of results. knew they would start ticking it down in big chunks after that. So happy with that decision, but am on the watch for what happens as I feel that they can fully turn the corner sometime, but i'm (and apparantly house broker) not expecting any FY net profit this year. Unless something big happens in mean time that is that affects revenue considerably.

[jacobjohn7] 30/11/2009 14:19

its either that bodg. or something else we shouldnt perhaps go into. ;o)

[bodgit] 30/11/2009 14:04

jj7, radarlove, thanks for your observations. In the short term, I called this one slightly wrong and choose to remain - with a current modest paper loss. So be it. I hope you both have exited at a profit.

BTW radarlove, did you by any chance get your 'handle' from the Dutch band, Golden Earring and their early '70's hit single, Radar Love'? Just curious as they were a favourite band of mine and to this day I still play some of their music. Cheers.

[jacobjohn7] 30/11/2009 13:33

sensible comments radar.

[radarlove] 30/11/2009 13:03

I agree with various posters. As so often the case with small caps, expectations were too high and a reality check occurred when the results appeared.

The company seem to have turned the corner but progress is gradual and fragile and there is still a long way to go before reality = expectation. The company needs to be growing at a far faster rate to justify its present PE.

One can see the share price going nowhere now but slowly down unless, as jacob suggests, there is news of further deals and revenue streams. And as with so many small caps, the spread is criminal only making it more unfair for the investor.

Anyway, ZOO was my flutter for 2009 and since April, the share price has had a good run, so, I sold out Friday. Good luck to all long term holders. I'll place ZOO on my watchlist, in case that Hollywood blockbuster deal suddenly happens.

[jacobjohn7] 30/11/2009 09:33

Hi bodg. the share price has gone down for a reason, on the broker forecast was a very large error. as stated above. But do we ever go up after results, even when they are perceived as good we go down.
And with these results, dependant of where you look it is either... 'Zoo swing to half year profit' or zoo make half year loss' mainly because, profit before tax. but put all the bits in that you do in business tax etc, then they made a 200k loss for first half, which is the stronger half of the year.
Don't get me wrong, I was in for the results expecting further growth and reasons for growth, but on the day having read between lines of results thought the share price would react like this.
The only thing that is going to change full year, and a falling share price is new deals/revenue streams to add to existing which would/should tip the balance, if operating margins are right.

[bodgit] 30/11/2009 08:50

gm all. Since the Interims, the share price has not quite followed the path I had hoped for. Hmmmm. Ah well, brighter prospects for the medium term it is then! I'll hold on. Good luck all.

[ninalog] 28/11/2009 18:30

look worthless to me, i've only 10000 so hit not bad but writing is on the wall here.

[aphzombie] 28/11/2009 17:40

Thanks for clearing that up JJ. Here is the quote from Yorkie Post:
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"Analysts at house brokers Finncap said the grant boosts its year end net cash expectation of £3m."
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... and that is actually meant to be read as "3m net debt at end of FY"!

Looks like amateur hour still reigns then ....

[jacobjohn7] 27/11/2009 16:25

I have just spoken with the finance director, apparently the house broker made an error in the way the note was worded.
Where it read like or was stated that cash balance at end of year will be somthing in the region of $3.3m it should really have been 3m net debt at the end of this FY. which is due to the convertible loans being taken into account.

So thats that one cleared up.... we have had this before were the brokers notes/reporting has been unclear.

[magnetincognito] 27/11/2009 15:54

a more informative read here, light at the end of the tunnel