Zoo Digital Group PLC Year End Trading Update and Notice of Results (4158W)

TIDMZOO

RNS Number : 4158W

Zoo Digital Group PLC

17 April 2019

17 April 2019

ZOO DIGITAL GROUP PLC

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

Year End Trading Update and Notice of Results

ZOO Digital Group plc, a world-leading provider of cloud-based localisation and digital distribution services to the global entertainment industry, today issues the following trading update in respect of the year ended 31 March 2019.

Group revenue for the year is expected to be in line with expectations at $29.0m (compared to $28.5m last year). Total localisation revenues grew 5% to $22.6m against a strong comparative figure that included a one-off project with a value of $2.5m for a major studio. Within this, subtitling revenues have recovered strongly and cloud dubbing service revenues were up 17% for the year during which ZOO was engaged on initial projects for eight major TV and film production studios (FY18: four).

The Group has continued to invest in accordance with its plans and the Company is well positioned to respond to a rapidly changing entertainment industry and the boom in demand for TV and movie content via streaming services. As previously explained, this investment, together with the faster than expected acceleration in the decline in legacy packaged media revenue, which does not form part of ZOO's long-term strategy, has impacted on profitability such that adjusted EBITDA in the second half will be around break-even (H1: $0.5m).

The benefits of this investment are apparent insofar as the ZOOstudio localisation platform, launched during the year, has received a 'Product of the Year' at the prestigious NAB Show awards. The Group is in discussions with significant industry players with regard to their adopting this platform.

The Group has been cash generative in the second half by focussing on strict working capital management, despite lower than anticipated profitability, such that the net cash balance of $1.8m at the year-end was double the amount at the half year stage with no debt other than the convertible loan notes. The business is therefore well-placed to grow organically during the forthcoming financial year.

The Company notes that its search for a new Chair is progressing well and expects to announce an appointment on or before the preliminary results which are scheduled to be published in the week commencing the 24 June 2019.

Stuart Green, Chief Executive commented,

"The financial outturn for 2019 is frustrating, having been impacted by market shifts and client disruption, but we are pleased that the business has grown and been cash generative. We have been able to meet our investment and operational objectives which leave us well placed in markets globally where the requirement for premium media localisation clearly continues to increase.

"We believe demand for our cloud-based services is building, client adoption is accelerating and our recently launched ZOOstudio platform has been well received in the market. We are confident for the future."

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 / Kate Bannatyne (corporate 
  finance) 
  Camille Gochez / Andrew Burdis (corporate broking) 
 Alma PR                                                020 3405 0205 
 Josh Royston / Hilary Buchanan / 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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April 17, 2019 02:00 ET (06:00 GMT)