Zoo Digital Group PLC Trading Update (7001N)

TIDMZOO

RNS Number : 7001N

Zoo Digital Group PLC

22 January 2019

ZOO DIGITAL GROUP PLC

("ZOO", the "Group" or the "Company")

Trading Update

ZOO Digital Group plc, the provider of cloud-based localisation and digital distribution services for the global entertainment industry, provides an update on current trading for the year ending 31 March 2019.

Although trading in the second half began encouragingly with the previously-reported disruption to localisation revenues having normalised, together with the Group continuing to secure a number of appointments as a preferred vendor with major media companies, the second half performance has been affected by the loss of a single, material localisation project that was scheduled to begin and be completed during the period. This was due to reasons wholly unrelated to the Company. Furthermore, revenues associated with processing legacy DVD and Blu-ray titles in the second half will be significantly lower than anticipated as the overall market decline in this area has accelerated more quickly than envisaged.

Accordingly, the Company now expects revenues for the second half to be comparable to those in the first half, and therefore to be approximately 10% below full year expectations. The Group expects to be profitable and cash generative in the second half, but in view of the largely fixed cost base of the Group and the higher margin associated with DVD and Blu-ray processing, Adjusted EBITDA* for the full year will be significantly below expectations. The Group expects to end the financial year with a cash balance broadly in line with that at the year ended 31 March 2018.

The Company will provide a further trading update for the year ending 31 March 2019 in April, prior to the release of its audited final results.

Stuart Green, Chief Executive of ZOO, commented:

"Whilst we are disappointed to fall short of expectations, albeit primarily due to one off occurrences, we are encouraged that we have seen year on year growth across our key service lines being dubbing and subtitling, as well as having successfully delivered projects for a number of new clients. We remain confident that the Company's strategy is correct and will enable us to capitalise on the long-term opportunity. We are now enjoying a growth in orders from our largest clients and expect to add significant new accounts during the remainder of the second half.

"With several major media companies recently announcing their intention to launch OTT services, there is no doubt that the market will continue to expand significantly and with it the growing demand for the premium services offered by ZOO. Our excitement for the future remains undiminished."

* Adjusted for share-based payments.

The information communicated in this announcement includes inside information for the purposes of Article 7 Regulation 596/2014.

For further enquiries please contact:

 
 ZOO Digital Group plc                                  0114 241 3700 
 Stuart Green - Chief Executive Officer 
 Phillip Blundell - Chief Finance Officer 
 
   finnCap                                                020 7220 0500 
 Henrik Persson / Emily Watts (corporate finance) 
  Camille Gochez / Andrew Burdis (corporate broking) 
 Alma PR                                                0778 090 1979 
 Josh Royston / Caroline Forde / Helena Bogle 
 

About ZOO Digital Group plc:

ZOO Digital is a provider of services allowing TV and movie content to be subtitled and dubbed in any language and prepared for sale with all major online retailers. ZOO's clients are some of the best-known brands in the world including major Hollywood studios, global broadcasters and independent distributors.

ZOO's point of difference in the marketplace is its development and use of innovative cloud technology. This ensures that content is localised in any language and delivered to all the major online platforms such as Amazon, iTunes, Google and Hulu with reduced time to market, higher quality and lower costs. ZOO's agile, cloud-based business model enables clients to respond to market trends, scale easily with business growth and capitalise on new routes to market in the fast moving and evolving digital industry.

ZOO operates from the entertainment hubs of Los Angeles and London with a development and production centre in Sheffield. Its full-service proposition includes digital distribution, subtitling & captioning, metadata creation & localisation, dubbing, artwork localisation, workflow and asset management.

www.zoodigital.com

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January 22, 2019 02:00 ET (07:00 GMT)