Zoo Digital Share Discussion Threads

[jacobjohn7] 04/12/2006 07:48

syberia, v impressive. Bit like lara croft

[macca28] 04/12/2006 00:16

siewl100: more idvd products here, as you know zootech has a contract with them,

[siwel100] 03/12/2006 22:36

macca...Nice iDVD promotion tool for the Pc game.
But take manga style graphics and put plot twists/endings in the hands of the viewer and you have would the makings of a new market for iDVD. No doubt someone will eventually do it. Certainly the installed DVD base is huge enough.

[macca28] 03/12/2006 22:21

dvd extra, adventure game, preview, options to view full screen and sound,

[jacobjohn7] 03/12/2006 20:56

plenty to go at there!

[jacobjohn7] 03/12/2006 20:54

nice web presence at HMV for idvd!



Got myself the gaz lineker footy quiz today. Very good.

[jacobjohn7] 03/12/2006 16:59

same as UK we dont fully have that, but you can start with a few of the production houses: Bequal, SnapTV, Brighter Minds, et al.
RE: Sonic as competitor.... even though sonic have sited little old zootech as a competitor alongside the likes of Apple, Toshiba, etc.... the direct word from zoo is that zoo dont consider sonic as a competitor, as in the software is used alongside the likes of sonics, as a bolt on.

[siwel100] 03/12/2006 15:43

Has anyone a list of iDVD titles available in the US, struggling to find a comprehensive one.

[siwel100] 03/12/2006 14:46

Diamante...Niche software houses are by their nature extremely high margin. Once cost base is covered then majority of income drops to bottom line less some increased support costs.
What people overlook is that development costs are retained within the staffing levels. The bodies can twiddle their thumbs or work full time on development, it makes no difference to the cost base.
The only increase to costs caused by development would be through through an increased body count. Considering they have developed the core products to date with existing personnel then its unlikely that any real increase is required or will be made.
The only areas for an increase in costs will be sales (flagged) and support. These are areas I have absolutely no problem with as they now have a range of products to go out and promote. Support is self financing, you dont need it unless you have an increased client base and therefore income.
So costs by the nature of the company are now contained. The divisions that were disposed of were both cash hungry and subject to large and fluctuating cash requirements.
Coming back to profit, this is where expotential growth is possible and with succesful software, inevitable. It comes back to the margin and drop to bottom line once costs are covered.
The real question is if there is a market for ZOO's software. Well the first studio is signed up and more importantly increased its order and renewed. The iDVD sector is growing expotentially in this country and has only just started in the rest of the world. TAS is still only on pre launch trial but with an eager group of companies wanting to use it first.
Potential for profit over the next 3 years given the above...I will be amazed if they are not well above the £2m in 36 months.
Risk? that costs get out of control. Well unless they decide to suddenly double the development team, but why? You are then left with sales& mktg, support. Sales are to a niche business to business sector, we are talking about less than a thousand easily identifiable companies.Its simply not a mass market type company with huge sales requirements.
The other risk is that the software isnt used or a competitor gains an edge. Well everything indicates a substantial ramp up in customers considering ZOO has only been offering software for 36 months. Importantly the software is heavily patent protected and there has been no sign of competitors being able to respond.
All sound too positive?....even ramping?.....well if anyone can go back through the figures and arguments and posts negatives, I would be delighted to hear them....I couldnt find them.

p/e 20...sounds aggressive but in the early years of a software company before it reaches maturity, profits can be growing by 100%+ pa. Its just the nature of the business. Once the costs are covered you have 80-90% of order values dropping straight to bottom line......If you look at similar niche software houses then for the succesful ones a p/e 80+ isnt unusual. Its simply because its rated on extremely fast growing future income.
Its worth noting that Zoo isnt a simple uk based software house supplying a specialised product to a uk sector. Its an international company supplying to a global niche market. A very different animal as far as potential and valuations are concerned.

[diamante] 03/12/2006 14:26

If you don't mind buying from people with zero feedback who say this (first one in list of search for ttn), then it looks like you can get it for 99p, plus £1.50 p&p. I'd be a bit wary of someone selling a brand new and sealed DVD which they have somehow managed to watch a couple of times. Maybe they have a special DVD player which play a dvd without breaking the packaging seal! And the plastic surgery on ANNE rOBINSON has worked wonders!

Test the Nation

Brand New Sealed (private collection watched a couple of times max)




New completed sales seem to go for about £5/6 including postage - still very cheap compared to what I expected.




Sewage, yes the case seems compelling doesn't it. The numbers add up even using the fully diluted , ie, worst case, so there is possible upside from those if conversion doesn't fully take place for some reason. I think a p/e of 20 in isolation is a bit heavy going, and could only be plausible on a peg less than 1 (say 0.8), implying eps growth next year of about 25%, or forecast profits rising next year from £250kish to £310kish. Just one extra tas/reg sale would blow that figure away, assuming current licenses are renewed. (one extra sale would add perhaps £750k to the bottom line, more or less tripling profits at a stroke).

[uknighted] 03/12/2006 13:36

Thanks Diamante. You can (of course) buy it much cheaper on ebay!!
In todays NOTW is a free sampler WTBAM dvdi. Should genereate some interest.

[siwel100] 03/12/2006 12:50

What has suprised me is the sheer volume of iDVD games available this year. I expected a significant growth but we appear to be double the volume of last years titles.
Significantly, the larger markets in Germany, France, Japan the US as well as the rest of the world are still lagging us by at least 18 months. As those markets develop, so the income for ZOO is going to expand very rapidly. There may be a focus on the Studio tools for instant top line impact, but the iDVD market looks set to dwarf it over the coming years.
Interestingly, as the developers refine offerings and a broader set of companies see what is possible, I also think we will start to see the innovative marketing products and specialist niche products discussed in the past but yet to emerge. This will not only broaden the market but provide income through the year and place less importance on the christmas market.
For the many still wary of ZOO considering its recent past, the key question will be their money management. Have they the controls and commercial skills to manage their cashpot and invest in development only in line with income? No way to reassure those determined to be negative, but the next two sets of results should provide that reassurance. The major difference now is that development is no longer an investment with no return. The core products are developed and producing an increasing income.
Will be an interesting and hopefully an extremely profitable ride with ZOO over the next 36 months.

Current market Cap £2.8 million
Finance raised £3.98 million
Shares in circulation 5.4 million
Loan conversion would increase circulation by 7.3m giving 12.7m .

£250k profit would produce fully diluted eps 2p
£500k .................................. eps 4p
£1m..................................... eps 8p
£2m..................................... eps 16p


Given a fairly aggressive p/e 20 considering growth potential:

eps 2p @ 40p sp
eps 4p @ 80p sp
eps 8p @ 160p sp
eps 16p@ 320p sp

This ignores the high margin and cash generative nature of specialist niche software companies which often produces a higher p/e in early years. Also ignores current cash pile following recent fund raising......cash in bank assuming just a modest £2m + eps at 2p would give a fully dilute share price at 70p ish assuming the p/e 20........applied to 4p eps and we are up to 110p......It gives a indication of how far the share price can develop with even a modest swing into profitability, something the company has already said will happen this year with their maiden profit.

Given the nature of the ZOO software, its heavy patent protection and the fact it operates in a market with only one other key player. Its not unreasonable to assume a very rapid forward growth given the competitors (Sonic) inability to respond with their products. If you then add the rapid takeup of their current products and the pipeline of new ones ZOO are launching, to look at £2m+ profit over the next year or two may seem over optimistic, but not when you look at the nature of their business.

On a different note, the convertible loan is an interesting item. By its nature it means the investing fund will only have 3 options. Either it can ride the share price increase and wait for dividend introduction, then decrease its position to meet institutional demand, or it can look to sell its holding to a third party, the obvious one being a bid, or it could not convert and be bought back by the ZOO.
In the first 2 cases the sheer size of the holding makes it a forced hold and in effect liquidity is based up the smaller 5.4m shares in circulation. When you then look again at this figure, it comprises both the Directors who added to extensive holding in the recent fundraising plus long term holders who held during the fall from the 20p+ spike without selling. An interesting aspect of the fall was the lack of volume. It was not triggered and driven by large holders selling.
Perhaps those large holders will finally sell, but hard to see the logic of holding from equivilant £11+ to sell at £1.......or at some point they may average their positions by buying. Other than the Directors who invested £500k, they did not participate in the fundraising, either because they did not want to or were not asked. The latter is a possibility due to the nature of the convertible loan and structure of the refinance.

Any way you look at it, ZOO is currently an exceptionally illiquid stock and is likely to remain so not just in the short term but in the forseeable future.That was a strong negative in the past when the share price fell so hard on such small selling volume, but is now a strong positive as the software income ramps up.

Anyway, enough of my pondering and playing with figures on a Sunday afternoon.

[diamante] 03/12/2006 12:46

uk, I'm not sure which bit is confusing. I got an email from Play.com, with a promo for idvds. I posted a link to their idvd section, sorted in price order, saying there were iDVDs suitable for everybody, whatever their taste. The cheapest was £6.99 iirc. I posted another link to test the nation, an idvd, priced at £3.99, which I think may be a mistake. iT certainly doesn't appear in the previous list as the first entry (where it should be on price order), so something has gone amiss with their listing somewhere. I think it's a simple misprice, which I expect they'll correct as soon as they realise. Meanwhile, you can buy test the nation double disc idvd for £3.99 delivered, but I suspect that could be corrected to £13.99 at any time. Maybe £3.99 is the correct price, I don't know, but it looks too cheap to me.

[uknighted] 03/12/2006 10:44

Diamante - didnt quite follow what you were saying about the play.com offer, could you explain please?

[jacobjohn7] 02/12/2006 18:18

All the dvd extra games, are very polished, its not square peg in a round hole, they are taking the genre, into a highly professional realm, that even more programmes/sports/etc are gonna want to take advantage of this genre...

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

Question of Sport, Unquestionably Great!!, 19 Nov 2006
Reviewer: dude "dudey" (Britain) - See all my reviews
Whether you like the program or not this game is fun for all. It is very similar to the program including your favourite rounds and it is very easy to work and understand. It is not too difficult to answer questions but still provides some challenge. There is very little question repeat each time one plays. Also, it provides single or multiplayer games and it features the actaul presenter, Sue Barker, throughout.
It is definitely a worthwhile buy and good value for money, a good xmas present for both adults and children.


17 of 19 people found the following review helpful:

Just got this and it's great fun, 7 Nov 2006
Reviewer: Nell (UK) - See all my reviews
I love a Question of Sport on the telly and this game doesn't disappoint. Its got all the familiar rounds from the series and loads of questions. You can play in teams as well. This would make a great pressie too.

Was this review helpful to you? (Report this)

[jacobjohn7] 02/12/2006 18:10

new one, and what a surprise.... dvd extra
PS: quite like the size they have to insert the logo at, most prominent of them all, its not gonna be long before punters start to work out the best type of product.

[jacobjohn7] 02/12/2006 17:48

one prob i think is that, the back street accountants cant do Limited companies, dont they have to be chartered to do this. VAT is easy to apply for, but you do lay all your cards on the table to the authorites that way... some like it, some dont, you HAVE to be VAT reg over around 58k I think it is.
Im VAT reg as I saw benefits for my business.

[diamante] 02/12/2006 15:37

Play.com now have an interactive section on their promo email they send out (as well as a dedicated section on their website).

Here are some cheap stocking fillers, Something for everyone.



One is mispriced I think, since it doesn't appear in the above list. Should sell a lot until they discover their mistake

[siwel100] 02/12/2006 12:44

Diamante, actually your post is good and sensible advice. One of the biggest problems for start up's is lack of confidence/research by the owner. This often leads them to follow the "safe" but very expensive route of following professional advice.
Often they get nothing but standard formulae guff and being directed towards standard and very expensive products.The bank manager is one of the worst people to talk to, he is nothing more than a salesman for the companies products and services.
For someone starting a business which is going to be anything larger than a hobby or simple self employment, the only worthwhile investment would be a good local bookeeper a few hours a month. Its rarely worth the effort for a small business person to learn an accounts package and if an experienced bookeeper is chosen you get a chore done at a low cost and a great deal of free advice.

[diamante] 02/12/2006 12:31

Rob, re your business. I'll go against the conventional wisdom about seein your bank manager, getting an accountant and discussing this and that with them.

For a ltd company, just buy one of the shelf, look in exchange and mart, they used to be £40, and you get them instantly. Make sure they guarantee not to have traded. You do it over the phone. You can change the rather odd name it will have later. (You'll save perhaps £1500 by doing that). Vat is easy to register for, and easy to do yourself - you don't need anty help.

There's no need to see anyone for a year - just keep obvious records of everything. You'll probably need an accountant, but don't get a chartered one (unless you're starting a big business, not a one man band), because they are effectively tax collectors/ pension salesmen. One without professional qualifications can give you better advice, or at least advice less governed by their professional 'integrity'.

I'm sure most will disagree with my approach, but after trying full prof advice, partial and virtually none, the least work and cost was with the minimum 'help' from others.

[jacobjohn7] 02/12/2006 12:26

well, im certainly more clued up on wines, I know what each one broad region is and tastes etc.. but like you say they can do anything with offers... but nice to know about the odd qty one at decent prices... like to think im getting a bargain (hence why I recommend the zoo 2006 vintage!) set for further vintage in 2007, with short supply and high demand raising the price!
a neigbour mentioned the NDP before, so it does come highly recced. I do like my (qty) fizzy stuff though if it has to be white personally. I have a taste for CAVA when not on champers prices.

[uknighted] 02/12/2006 12:13

Yes, take 40% off Threshers price and you're about the same as the Tesco price - before the 25% discount!! Great marketing and publicity stunt by Threshers.
I agree about the Chateau NDP - £7.99 less 25% for Tescos Finest, good value.

[diamante] 02/12/2006 12:07

Rob, yes I'd seen the threahers offer - initially it looks great, but now I think it was all pre-planned. I did print out the voucher and intend to stock up there, but we were in Tescos yesterday, and they had, unknown to me before then, 25%. That was an extra 25% off their current offers, many half price. It's always best to have some idea of the value of the stuff you are buying - its so easy for retailers to sell a £1 bottle of plonk for £7, then reduce it ny half, then another 25% on top. What caught my eye were the two wines I mentioned - the ChATEAU NDP is usually about £10 in France (the stuff they sell at that price in French supermarkets, not the best vintages). I'm more of a cheap plonk bloke, but occasional like a relatively decent bottle, so bring a couple back each we're in France. (If you want a brilliant substitute Champagne for Christmas, and better than most, then LIDL have Cremant d'Alsace for about a fiver - pick up a goose while you're there.).