REG - Zinc Media Group PLC - Final Results
Wed 07:00
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RNS Number : 7122G Zinc Media Group PLC 30 April 2025
30 April 2025
Zinc Media Group plc
("Zinc" or the "Group")
Results for the year ended 31 December 2024
and
Notice of Annual General Meeting
Zinc Media Group plc (AIM: ZIN), the award-winning television and content
production group, is pleased to announce its audited results for the year
ended 31 December 2024 ("FY24").
The Group is pleased to report a strong set of results and significant
strategic progress including:
· Delivering growth in adjusted EBITDA, Operating Profit and PBT
for the fourth consecutive year and profit at adjusted PBT level for the first
time in many years; and
· Re-focusing its portfolio structure on more profitable television
and content production. It also broadened its offering with growth into new
markets that are expected to deliver more repeat series and valuable IP in the
future.
Mark Browning, CEO of Zinc Media Group, commented:
"Zinc has made excellent progress this year. We have delivered a strong set of
results, reflecting the Group's successful transformation.
We are reporting record profit and presenting a stronger Group which is
refocused following strategic disposals and acquisitions, and increasingly
diversified, providing deeper resilience to market fluctuations.
Our reputation for quality has never been stronger, and the deep trust
afforded to us is demonstrated by the extraordinary level of access we are
given to produce our agenda-setting programmes. This makes us stand out, in
an industry where the right to win is defined by the quality of content.
I am delighted by our strong performance this year, and excited by how well
we've started, with significantly more revenue booked at this stage of the
year than we had last year which underpins our confidence looking ahead."
£m 2024 2023(1) Movement
Income Statement
Continuing operations
Revenue 32.3 36.6 (4.3)
Gross Profit 14.4 14.1 +0.3
Gross Margin 44.5% 38.5% +6.0%
Adjusted EBITDA Profit(2) 1.5 1.4 +0.1
Adjusted Operating Profit(3) 0.7 0.0 +0.7
Adjusted Profit/(Loss) Before Tax(3) 0.3 (0.4) +0.7
Statement of financial position
Cash 6.3 4.9 +1.4
Debt (3.5) (3.5) -
Net cash 2.8 1.4 +1.4
(1) Restated for discontinued items. The numbers reported in this annual
report are based on continuing operations, which follows the restructuring of
the Group in FY24. All prior year comparisons have been adjusted to make
comparisons on a like for like basis. This may mean numbers vary to prior
trading updates.
(2) Adjusted EBITDA is defined as EBITDA before Adjusting Items (see note
8) comprising share-based payment charges, gains on disposal of fixed assets,
reorganisation and restructuring costs, acquisition costs and contingent
consideration
(3) Adjusted Operating Profit is defined as Operating Profit before
Adjusting Items and amortisation of acquisitions. Adjusted PBT is defined as
PBT before adjusting items and acquisition-related costs (amortisation and
interest on unwinding of intangible assets related to acquisitions).
Financial Highlights
• Adjusted EBITDA from continuing operations increased 7% to £1.5m
(FY23(1): £1.4m); Adjusted Operating Profit up to £0.7m (FY23: £0m).
• Revenue from continuing operations decreased by 12% to £32.3m
(FY23(1): £36.6m), reflecting portfolio changes, including the disposal and
closure of non-core businesses during the year, and some opportunities moving
into the new financial year.
o On a pro-forma basis, including a full year of Raw Cut, revenue is flat
year-on-year.
o 95% of revenue was delivered from existing customers, up from 80% in FY23.
o The Edge Picture Company, acquired in 2022, continues to perform ahead of
acquisition expectations, generating £12m of revenue in FY24.
• Gross margins increased from 38.5% to 44.5%, driven by higher
margin TV work and a material one-off high margin project in content
production.
• Robust balance sheet with cash of £6.3m as at 31 December 2024
(31 December 2023: £4.9m), a £1.4m increase on FY23 driven by the positive
trading performance and working capital inflows. Cash as at 24 April 2025 was
£3.9m.
• Statutory loss before tax from continuing operations reduced by
£0.1m to £1.4m (FY23: £1.5m). Excluding acquisition-related costs and
adjusting items the Adjusted Profit Before Tax has improved by £0.7m to a
£0.3m profit.
Strategic and Operational Highlights
• In FY24 the Group made significant changes to its portfolio
structure to focus the Group on more profitable television and content
production, whilst broadening its offering:
o Acquired Raw Cut TV in October 2024. Raw Cut produces for ITV, Channel 4
and Channel 5, and has a significant distribution and IP catalogue.
o Completed the sale of Zinc Communicate Publishing and discontinued the
Group's video marketing business.
o Launched Electric Violet, a major new entertainment television label
headed by the former Executive Producer of Strictly Come Dancing, expanding
the Group into an exciting sector underpinned by valuable IP rights.
• The Group further invested in its strong platform of
infrastructure, central services and specialist expertise in areas including
finance, technology, marketing and PR, human resources and governance,
commercial strategy and post-production. This platform enables scalability and
operational gearing as the Group grows through investment and selective
M&A.
• The Group was awarded "Production Company of the Year" for the
second year running at the prestigious New York Festival Film and Television
Awards.
Highly Acclaimed Programmes
• Eight television series were recommissioned and four new series
were commissioned which have the potential to return in future years.
• The Group produced 178 hours of television production, with a
number of documentaries leading the UK news agenda, including:
• Israel and the Palestinians: The Road to 7th October: The 3-part
series for the BBC documents the decisions that have shaped
Israeli-Palestinian conflict over the past two decades.
• Top Gun: The Next Generation (working title): The Group was in
production for its largest ever USA television series worth $9m for National
Geographic Channel which will be available on Disney+.
• Rob & Rylan's Grand Tour: This new series for the BBC launched
to considerable critical acclaim, including being nominated for a BAFTA award,
and a new series Rob & Rylan's Passage to India began production towards
the end of FY24.
• Bargain Loving Brits in the Sun was recommissioned for an
impressive 80-episode series, which began filming in FY24 and will complete
early FY25.
• A multi-million pound series called Defending Europe was produced
by Atomic Television for the National Geographic Channel and is available on
Disney+ and Hulu. Atomic Television was launched as an organic investment in
2023.
• The Edge won numerous awards for the quality of its work including
Cannes Corporate Media & TV Awards, The Learning Awards, EVCOM London Film
Awards and New York Festivals TV & Film Awards.
• There are currently 60 television programmes produced by Zinc
companies available to view in the UK, either on terrestrial channels,
on-demand or via subscription TV platforms. A full list of Zinc produced
programmes currently available to watch is on the Group's website:
https://zincmedia.com/what-to-watch-on-tv/
(https://protect.checkpoint.com/v2/___https:/zincmedia.com/what-to-watch-on-tv/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkZDFiNmI3N2NhOWU3YTEwMDllYjFlYmU0NGQyZjAxYzo2OmVhNDQ6MzNjYjU1OTc2YjQzOTA4N2Q0ZDM4MmI3NjYzN2MwM2E2N2FhMTUzNzVjZDNlZmNjMzNhNTIyZGVmNjRjM2ViZTpwOkY6Tg)
.
FY25 Trading and Outlook
• The Group is trading strongly with £27m of revenue already booked
and expected to be recognised in FY25, versus £23m at this stage in FY24 1
(#_ftn1) .
• Post period end, the Group has won several new and recommissioned
contracts, further strengthening the Group's forward bookings and visibility
into FY25, including The Inner Circle, a brand new multi-million pound BBC
prime time quiz show which Zinc owns the potentially valuable IP to and Race
Against the Tide, a 7-figure commission of an innovative new craft reality
show.
• The Group's pipeline remains strong with a further £7m of revenue
at a highly advanced stage (compared to £7m at the same point last year),
along with significant opportunities in earlier stages of development.
• The Group has made good progress in its efficiency and synergy
programme and expects to exceed its targeted permanent efficiency savings of
£0.5m in FY25.
• These factors provide the Board with confidence in delivering FY25
market expectations.
The FY24 results are summarised in a short film and presentation on the Zinc
website here: zincmedia.com/investor-information/Full-Year-Results/
Copies of the annual report and accounts
The annual report and accounts is available on the company's website at
www.zincmedia.com
(https://protect.checkpoint.com/v2/___http:/www.zincmedia.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkZDFiNmI3N2NhOWU3YTEwMDllYjFlYmU0NGQyZjAxYzo2OjFhYjE6YmM4YTIwMTU5YWFjNjkxMzc2MWM5Mjg2YmY2ZDgxMmI4NGM1ZDFjNzU2NjdjNTFiZDI2MjAyNzgzMzNiZDRjYjpwOkY6Tg)
and a hard copy will be posted to those shareholders registered to receive
one.
Notice of annual general meeting
Accompanying the annual report and accounts is notice of the Group's 2025
annual general meeting (the "AGM"), which will take place at 10.00am on 22 May
2025 at Singer Capital Markets' offices at 1 Bartholomew Lane, London, EC2N
2AX.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation. The Directors of the Company take responsibility for
this announcement.
For further information, please contact:
Zinc Media Group plc +44 (0) 20 7878 2311
Mark Browning, CEO / Will Sawyer, CFO
www.zincmedia.com (http://www.zincmedia.com)
Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 20 7496 3000
James Moat / Sam Butcher
MHP +44 (0) 7817 458804
Oliver Hughes / Eleni Menikou / Ollie Hoare
About Zinc Media Group
Zinc Media Group plc is a premium television and content creation group.
The award-winning and critically acclaimed television labels comprise Atomic,
Brook Lapping, Electric Violet, Raw Cut, Rex, Red Sauce, Supercollider, Tern
Television, Tomas TV along with Bumblebee Post-Production, and produce
programmes across a wide range of factual genres for UK and international
broadcasters.
Zinc Media Group's commercial content creation unit includes The Edge Picture
Company, one of the UK's largest brand film-making companies, and Zinc Audio,
specialising in podcasts and radio production.
For further information on Zinc Media, please visit www.zincmedia.com
(https://protect.checkpoint.com/v2/___http:/www.zincmedia.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkZDFiNmI3N2NhOWU3YTEwMDllYjFlYmU0NGQyZjAxYzo2OjFhYjE6YmM4YTIwMTU5YWFjNjkxMzc2MWM5Mjg2YmY2ZDgxMmI4NGM1ZDFjNzU2NjdjNTFiZDI2MjAyNzgzMzNiZDRjYjpwOkY6Tg)
Chairman's Statement
The Group has delivered its strongest financial results in over a decade,
driven by exceptional television and content production. In FY24, the business
was streamlined with a portfolio restructure focused purely on production with
the acquisition of Raw Cut TV - a consistently profitable and cash-generative
company - the disposal of the loss-making Zinc Communicate Publishing and the
closure of a loss-making branded content and video marketing business.
Additionally, the launch of Electric Violet, our first TV entertainment label,
further strengthened our portfolio.
Strategic portfolio changes by senior management have had a major impact on
the Group's bottom line. Improved gross margins in television production,
along with a high-margin contract in The Edge, contributed to the highest
adjusted Profit Before Tax in many years and profit at adjusted PBT level for
the first time in many years, as well as a £0.7m improvement in adjusted
Operating Profit from the Group's continuing operations. Gross margins reached
record levels, and the Group closed the year with its highest cash balance
under this management team. Achieving this amidst tough economic headwinds is
an outstanding accomplishment, with even greater potential ahead.
The Group's current ambition is simple: to be a £100m+ turnover television
and content production company, generating owned IP and powered by a Group
platform. The Group intends to achieve this through organic growth and further
strategic acquisitions.
The Group's content proposition is built on trust and quality. We are
trusted with the most exclusive access to world leaders for programmes
including the critically acclaimed Israel and the Palestinians for the BBC,
trusted with complex access, including in to the US military for the series
Top Gun - The Next Generation (working title) for National Geographic, trusted
to deliver hundreds of hours of returning series, including the hit series
Bargain Loving Brits in the Sun for Channel 5 and trusted to work with the
biggest global stars as seen in our co-production with Idris Elba for the BBC
and CBC, Paid in Full: The Battle for Black Music. Our quality kitemark is
world famous, as recognised with our award as Production Company of the Year
at the New York Festival Film and Television Awards for the second year
running.
The start of the new financial year has been excellent, with a slew of new,
high-profile commissions including the recommission of the hit series Rob and
Rylan's Grand Tour, which will now see the pair travel to India, and a new
multimillion pound primetime quiz show, The Inner Circle, hosted by Amanda
Holden. Forward bookings for the current year are well ahead of the same time
last year, and we have a strong pipeline for the year ahead. This level of
activity demonstrates the strength of our reputation in the industry and
underpins our confidence in delivering long term profitability.
The Group is now seeing its growth in EBITDA flowing through to bottom line
adjusted operating profit and PBT due to the realisation of efficiency savings
and a streamlined portfolio of companies. The Group continues to balance long
term profit growth with further organic investment in new markets and we have
a highly developed pipeline of acquisition prospects.
The Board would like to thank the management team, the employees and
freelancers for their professional and dedicated work, as well as our
shareholders for their support in what has been a year of record achievement
for the Group.
CEO's Review
During the year, Zinc made substantial progress in executing its strategic
plan, improving revenue quality, increasing gross margins, EBITDA, and PBT
from continuing operations, increasing cash, diversifying its customer base
and streamlining the Group portfolio.
The Group now comprises a total of 10 businesses that operate across two
areas: television production (Tern, Brook Lapping, Red Sauce, Raw Cut,
Supercollider, Rex, Atomic Television and Electric Violet) and content
production for brands and businesses which is now housed within The Edge. All
businesses are supported by Bumblebee post-production which also generates
revenue from third parties.
Increasing levels of Adjusted EBITDA, PBT and operating profit
The Group delivered £0.7m of adjusted operating profit, the highest adjusted
PBT in over a decade and £1.5m of adjusted EBITDA in the reporting period. To
put this in context, in 2020 at the start of the Group's turnaround plan under
new management, the Company reported an adjusted EBITDA loss of £0.8m and an
adjusted loss before tax of £2.5m. In the space of four years, despite the
economic and market turmoil the Group has grown profits considerably, and this
is set to continue in the years ahead.
At the start of FY24 the Group announced it was targeting £0.5m annualised
savings to be realised in FY25 and expects to exceed this target.
Excellent revenue quality and growing international client base
The Group improved revenue quality during the reporting period, with 95% of
revenue being delivered from existing customers, up from 80% in FY23. The
Group also improved its revenue diversity, reducing its dependence on the UK
market, with revenue from outside the UK now at 48% (FY23: 23%).
Notable new business wins in the year included a commission for a new
multi-million-pound series for a major global streaming platform. Defending
Europe, produced by Atomic Television, explores 1,000 years of European
military history, was produced for the National Geographic Channel and is
available on Disney+ and Hulu. Additionally, a major new biopic on one of the
biggest pop bands of the 20th century has been produced by Supercollider. The
Group has also seen a strong level of recommissions, including a new series
featuring Rob Rinder and Rylan Clark, titled Rob & Rylan's Passage to
India from Rex, which is a sequel to the highly acclaimed Rob & Rylan's
Grand Tour, and a new 80-episode series of Bargain Loving Brits in the Sun,
produced by Red Sauce. Filming of the large international series Top Gun: The
Next Generation continued throughout the year with the series due to air on
National Geographic and Disney+ in autumn 2025.
It is worth noting that the US import tariffs announced at the beginning of
April 2025 do not apply to services, including TV production and distribution,
and therefore do not impact Zinc selling its services to the US.
Unique platform driving margins and operating leverage
The Group has invested in a common platform to support every business in the
portfolio. This platform of central services provides specialist management
expertise which would otherwise be unaffordable within any one label, in areas
including finance, technology, marketing and PR, human resources and
governance, commercial strategy and post-production. This platform of
services allows for centralisation of common functions and infrastructure,
improving gross margins and as the Group scales further will deliver
operational leverage as new companies join through investment in new labels
and selective M&A.
The importance of the Group platform was demonstrated during the acquisition
of Raw Cut. Its existence, and the quality and scale of services it brings,
enabled the Group to rapidly integrate the business to benefit from cost
synergies and to operational leverage from day one.
Technology is a core pillar of the Group platform and brings continual
innovation to production workflows and remote post-production. The Group is
investing in, and experimenting with, AI driven production and post-production
solutions and also sees future opportunity in AI powered creative development.
Successful acquisitions helping to drive growth
The acquisition of Raw Cut Ventures Limited, owner of Raw Cut Television, the
UK leader in 'Blue Light' programming (embedded with police and emergency
services), has strengthened the Group's production capabilities and expanded
Zinc's geographic footprint into Wales, resulting in UK-wide presence for the
Group. UK broadcasters remain obligated under Ofcom to commission outside
London and have to deliver a minimum number of hours of programmes made within
the four UK nations. This makes Zinc one of a small handful of producers with
substantive production bases in England, Wales, Scotland and Northern Ireland.
The Group launched Electric Violet, a new entertainment label led by a former
Strictly Come Dancing and The Voice Executive Producer, marking its expansion
beyond factual television into the potentially lucrative entertainment genre
underpinned by proprietary IP rights.
The Edge, which was acquired in 2022, continued to perform well in the
reporting period, securing long-term contracts across the professional
services, financial and industrial sectors. Furthermore, its presence in
Middle Eastern markets is expanding, while The Edge's learning division has
seen notable growth. Recent highlights include major projects enhancing
Network Rail's workforce skills, mandatory learning around risk for a global
professional services firm and pioneering safety training for Calor Gas.
Programme highlights
2024 was another excellent year of programme and editorial highlights.
Across the Group's television labels, eight series were recommissioned.
Returning series are the backbone of a successful television company as they
underpin long term growth and investment. Returning series include Rob and
Rylan's passage to India and Sunday Morning Live for the BBC, Special Ops:
Crime Squad UK for Dave, Bargain Loving Brits for Channel 5, and the latest
contemporary history documentary Israel and The Palestinians for the BBC.
Our television companies produced a total of 178 hours of original television
production. Alongside the commercially valuable returning series were a high
volume of reputational feature documentaries and singles. While these do not
span numerous years they build considerable industry reputation, which often
sees the commissioning channel return year after year for further
commissions.
Zinc's proposition is built on trust and quality. It has a global reputation
for delivering the highest quality production as evidenced in numerous awards
including being crowned Production Company of the Year for the second year
running at the New York Festival Awards. It is trusted by clients to deliver
exclusive access as demonstrated by the Israel and the Palestinians series
which featured contributions from Hillary Clinton, John Kerry, Former UK Prime
Minister Tony Blair, Israeli Prime Minister Ehud Olmert, Palestinian Prime
Minister Salam Fayyad, and Hamas leader Ismail Haniyeh. Zinc is also trusted
to deliver at significant scale and to the highest technical specifications,
as evidenced by the highly complex series Top Gun: The Next Generation
(working title) for Disney+.
There are currently 60 television programmes produced by Zinc companies
available to view in the UK, either on terrestrial channels, on-demand or via
subscription TV platforms. A full list of Zinc produced programmes currently
available to watch is on the Group's new website:
https://zincmedia.com/what-to-watch-on-tv/
(https://protect.checkpoint.com/v2/___https:/zincmedia.com/what-to-watch-on-tv/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkZDFiNmI3N2NhOWU3YTEwMDllYjFlYmU0NGQyZjAxYzo2OmVhNDQ6MzNjYjU1OTc2YjQzOTA4N2Q0ZDM4MmI3NjYzN2MwM2E2N2FhMTUzNzVjZDNlZmNjMzNhNTIyZGVmNjRjM2ViZTpwOkY6Tg)
Dozens of other programmes were produced by Zinc Media Group in 2024, and many
more of these can be seen on the Company's website, zincmedia.com
(https://protect.checkpoint.com/v2/___http:/www.zincmedia.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkZDFiNmI3N2NhOWU3YTEwMDllYjFlYmU0NGQyZjAxYzo2OjFhYjE6YmM4YTIwMTU5YWFjNjkxMzc2MWM5Mjg2YmY2ZDgxMmI4NGM1ZDFjNzU2NjdjNTFiZDI2MjAyNzgzMzNiZDRjYjpwOkY6Tg)
, and social media channels. Zinc's group of companies produce content that is
watched by tens of millions of people across the world every year, and its
programmes lead the news and the national conversation across the United
Kingdom.
Market
In television, the UK PSB network groups (comprising the BBC, ITV, Channel 4
and Channel 5) represent the largest addressable market for Zinc with the
Group producing for all of them.
The total TV commissioning market for UK producers is worth approximately
£4bn 2 (#_ftn2) (UK PSB network groups account for approximately half this),
with the factual television spend (specialist factual, general factual and
factual entertainment), Zinc's core competence, at c.£1bn.
The fastest growing market for UK television producers is with the large
international channels and SVoD (subscription video on demand) platforms,
which has almost doubled since 2021, reflecting the entry of new players like
Apple and Disney. Zinc is capitalising on the growth in this market and this
is reflected in the significant increase in non-UK revenues. Zinc is also well
placed to continue to grow as the UK PSBs continue their push to spend on
television commissions made outside of London. This validates Zinc's continued
investment in Tern TV (Glasgow and Belfast), Red Sauce TV (Manchester) and
Atomic Television (Bristol), plus the recent acquisition of Raw Cut with
production bases in London and Cardiff.
While factual television, which is Zinc's television heartland, accounts for
approximately 25% of UK original television production, entertainment and
drama are the two largest genres, representing 27% and 37% respectively. The
launch of Electric Violet directly addresses our ambition to move into
entertainment.
In addition to broadcast television production, the Group's corporate and
brand production company The Edge continues to perform well and we are
investing further in the Middle East in FY25.
Current trading and outlook for FY25
The Group has seen strong momentum in the first quarter of the year. As at 21
April 2025, revenue secured and anticipated to be recognised in FY25 is £27m,
(up from £21m reported in February and £4m ahead of the same time last
year 3 (#_ftn3) ). Commissions and launches secured in the year so far
include:
· A move into reality TV with the commission of a major new series
for the BBC called Race Against The Tide;
· A landmark BBC documentary series, Israel and the Palestinians:
The Road to 7 October, chronicling the decisions that have shaped the
Israeli-Palestinian conflict over the past two decades;
· The Inner Circle, a brand new multi-million pound BBC prime time
quiz show, hosted by Amanda Holden, in which Zinc owns the programme and
format rights; and
· A 3-part series for Channel 4, Living Las Vegas, featuring
renowned actor Martin Compston, providing a deep dive into the glitz and grit
of Las Vegas.
Looking ahead, the Group has a solid pipeline with £7m of potential revenue
in highly advanced stages of discussion, plus extensive earlier stage
opportunities, supporting its confidence in the year ahead.
CFO's Report
£m 2024 2023(1) Movement
Income Statement
Continuing operations
Revenue 32.3 36.6 (4.3)
Gross Profit 14.4 14.1 +0.3
Gross Margin 44.5% 38.5% +6.0%
Adjusted EBITDA Profit(2) 1.5 1.4 +0.1
Adjusted Operating Profit(3) 0.7 0.0 +0.7
Adjusted Profit/(Loss) Before Tax 0.3 (0.4) +0.7
Statement of financial position
Cash 6.3 4.9 +1.4
Debt (3.5) (3.5) -
Net cash 2.8 1.4 +1.4
(1) Restated for discontinued items. The numbers reported in this annual
report are based on continuing operations, which follows the restructuring of
the Group in FY24. All prior year comparisons have been adjusted to make
comparisons on a like for like basis. This may mean numbers vary to prior
trading updates.
(2) Adjusted EBITDA is defined as EBITDA before Adjusting Items (see note
8) comprising share-based payment charges, gains on disposal of fixed assets,
reorganisation and restructuring costs, acquisition costs and contingent
consideration
(3) Adjusted Operating Profit is defined as Operating Profit before
Adjusting Items and amortisation of acquisitions
Income statement
Revenue
Revenue from continuing operations (£m)
The Group's diversified production base reduces the risk associated with
exposure to any one market or territory, with television production now
accounting for 63% of the Group's revenues (FY23: 66%), whilst production for
brands and businesses accounts for 37% (FY23: 34%). Furthermore, 48% of
revenues come from outside the UK (FY23: 23%).
Revenue from continuing operations decreased by 12% to £32.3m (FY23:
£36.6m), reflecting portfolio changes, including the disposal and closure of
non-core businesses during the year, and some opportunities moving into the
new financial year. On a pro-forma basis, including a full year of Raw Cut,
revenue is flat year-on-year.
Despite a slower H1, the level of TV commissioning from the autumn onwards was
excellent, with £16m of television production work commissioned between
September and January, including eight series each worth over £1m, recognised
in the income statement across H2 2024 and H1 2025.
Content Production encompasses brand and corporate film production by The
Edge, and revenue from continuing operations of £12.1m was broadly flat
year-on-year (FY23: £12.5m). This represents another strong year following
the acquisition of The Edge in 2022, at which point its 3-year trailing
average revenue was under £9m p.a. and the performance in FY24 was achieved
despite the instability in the Middle East affecting some international
business. The Edge has established a strong foothold in the attractive
learning content market which it is seeking to build on in FY25.
Gross margin and operating expenses
Group gross margins are the highest they've been in recent years.
Group gross margins from continuing operations (%)
The Group's gross margin increased during the period from 38.5% to 44.5% as
margins increased across both television and content production due to the
group's strategic actions taken to shift the focus of the Group into higher
margin TV work and a one-off high margin project in Content Production. £1.2m
of Content Production revenue has been recognised that relates to services the
Group has been paid for but was partially frustrated from performing by the
customer. The contract for these services concluded during the year and there
are no continuing contractual obligations post year end. Excluding this
one-off project gross margins were 42.4% and materially up year-on-year.
In FY22 a strategic decision was taken to increase the volume of lower margin
television revenue to support the Group's expansion into new television
markets. As these programmes have been recommissioned in FY23 and FY24 the
Group has been able to increase margins due to learnings from earlier series
and finding economies of scale across productions. A similar strategic
decision has been taken to help the Group expand into new television markets
in FY25, such as entertainment programmes and formats via the newly launched
label, Electric Violet, and a prime time quiz show that has been won and is in
production. As a result gross margins are expected to decrease in FY25 before
increasing thereafter due to associated high-margin IP revenue from selling
programmes and formats abroad.
Adjusting items incurred during the year amounted to £1.1m (FY23: £0.2m),
which mainly comprised the costs relating to the acquisition of Raw Cut which
were £0.8m, in addition to a £0.1m decrease (FY23: £0.4m decrease) in the
fair value of contingent consideration in relation to the acquisition of The
Edge due to its strong performance, and restructuring and share based payment
costs of £0.3m (FY23: £0.3m).
Operating expenses have risen by £0.5m to £15.3m, driven by acquisition
costs of £0.8m and other adjusting items. Underlying operating expenses,
excluding adjusting items, have fallen by £0.4m or 3%.
Adjusted EBITDA from continuing operations increased 7.5% to £1.5m (FY23:
£1.4m) and Adjusted Operating Profit increased to £0.7m (FY23: £0m), in
line with market expectations and the highest for 14 years.
The Group's adjusted EBITDA includes a loss of £0.4m from labels launched in
recent years that are yet to reach profitability. This includes Electric
Violet, which was launched in 2024, and Atomic Television, which was launched
in 2023.
Finance costs have fallen from £0.8m to £0.5m as a result of a £0.2m
reduction in interest relating to the unwinding of the present value of
contingent consideration on The Edge acquisition. £0.3m of interest was
payable on the Group's long-term debt (FY23: £0.3m).
The statutory loss before tax from continuing operations decreased by £0.1m
to £1.4m (FY23: £1.5m). The loss is largely driven by £1.5m of acquisition
related costs including £0.4m of amortisation of intangible assets that have
been acquired, £0.1m change in fair value of contingent consideration, £0.2m
unwinding of contingent consideration and £0.8m of one-off costs to acquire
Raw Cut during the year. Excluding acquisition-related costs and adjusting
items the adjusted Profit Before Tax has improved by £0.7m to a £0.3m
profit.
The Video Marketing and Brand Content division of Zinc Communicate has had a
negative impact on the Group's overall profitability and, following a
strategic and market review, the Group decided to wind down this division
during the year. The market has been challenging, particularly for sub-scale
businesses, and the Group decided to focus its corporate and brand production
within The Edge, which is larger and more established. Some staff moved from
Zinc Communicate's Video Marketing and Brand Content division to produce
corporate and brand films in The Edge. The Group also sold its non-core
Publishing business to enable the Group to focus on its core, higher margin,
television and content production businesses.
Earnings per share
Basic and diluted loss per share from continuing operations in FY24 was 2.44p
(FY23: loss per share of 6.52p) and from discontinued operations in FY24 was
12.83p (FY23: loss per share of 2.53p). These measures were calculated on the
losses for the period attributable to Zinc Media Group shareholders from
continuing operations of £0.6m (FY23: loss of £1.4m) and from discontinued
operations of £3.0m (FY23: loss of £0.6m) divided by the weighted average
number of shares in issue during the period being 23,021,816 (FY23:
21,985,965).
Dividend
The Board has not recommended a dividend in respect of the year ended 31
December 2024 (FY23: £nil).
Statement of Financial Position
Assets
Cash (£m)
The cash balance at the end of December 2024 was £6.3m, representing an
increase of £1.4m, or 29%, during the year. The increase in the Group's cash
balance was driven by the positive trading performance and working capital
inflows, particularly on large projects where working capital has been
efficiently managed.
Trade and other receivables have reduced to £6.2m (FY23: £10.6m) reflecting
the reduction in revenue and collecting debt more quickly.
Equity and Liabilities
Total equity has reduced from £5.8m to £3.5m as the loss in the year more
than offset the issue of new equity in relation to Raw Cut's initial
consideration.
Total liabilities increased from £18.6m to £19.8m due to a £1.4m increase
in deferred consideration payable relating to Raw Cut and The Edge. The Group
had an outstanding balance on long-term debt of £3.5m at year-end (FY23:
£3.5m). The long-term debt holders are also major shareholders who own 39% of
the Group's shares.
Cash Flows
The Group generated cash of £1.2m in the year (FY23: £3.5m) in its
operations, mainly driven by a decrease in working capital due to tight
working capital management, including receiving advance payments from
customers on some large productions. The net movement in the year was an
increase in cash of £1.3m (FY23: increase of £1.3m) after financing activity
cash outflow and finance costs of £0.8m (FY23: outflow of £1.6m) was more
than offset by cash generated in investing activities of £1.0m (FY23: cash
used of £0.5m).
The financing activity cash outflow and finance costs of £0.8m comprise lease
payments of £0.5m mainly relating to the Group's offices (a £0.4m reduction
year-on-year) and £0.3m of long-term debt interest payments (a £0.1m
reduction year-on-year).
The cash generated in investing activities of £1.0m was driven by £1.1m of
net cash received in the acquisition of Raw Cut and £0.1m received on the
sale of Zinc Communicate Publishing, partially offset by a £0.2m outflow on
capital expenditure (a £0.3m reduction year-on-year).
Key Performance Indicators (KPIs)
In monitoring the performance of the business, the executive management team
uses the following KPIs:
· Revenue growth, including revenue from repeat customers, number
of returning television series and new business pipeline strength
· Profitability assessed by key measures including gross margins,
Adjusted EBITDA and Adjusted Operating Profit
· Cash generation and cash management
· Performance and integration of acquisitions
· Industry recognition for producing quality content
These KPIs have been reported on within the Strategic Report within the
Chairman, CEO and CFO's reports.
Consolidated Income Statement for the year ended 31 December 2024
2024 2023
Restated
Notes £'000 £'000
Continuing operations
Revenue 4 32,308 36,633
Cost of sales 5 (17,916) (22,563)
Gross profit 14,392 14,070
Operating expenses 5 (15,270) (14,771)
Operating loss (878) (701)
Analysed as:
Adjusted EBITDA 1,510 1,405
Depreciation 5 (852) (1,452)
Amortisation 5 (446) (431)
Adjusting items 8 (1,090) (223)
Operating loss (878) (701)
Finance costs 9 (528) (776)
Finance income 9 26 9
Loss before tax (1,380) (1,468)
Taxation credit 10 834 53
Loss from continuing operations (546) (1,415)
Loss from discontinued operations 11 (2,953) (556)
Loss for the year (3,499) (1,971)
Attributable to:
Equity holders (3,514) (1,990)
Non-controlling interest 15 19
Retained loss for the period (3,499) (1,971)
Earnings per share
From continuing operations:
Basic 12 (2.44)p (6.52)p
Diluted 12 (2.44)p (6.52)p
From discontinued operations:
Basic 12 (12.83)p (2.53)p
Diluted 12 (12.83)p (2.53)p
The loss for the year attributable to equity holders from continuing
operations is £561,000 (2023 restated: £1,434,000) and from discontinued
operations is £2,953,000 (2023 restated: £556,000).
The accompanying principal accounting policies and notes form part of these
consolidated financial statements.
Consolidated Statement of Comprehensive Income for the year ended 31 December
2024
2024 2023
Restated
£'000 £'000
Loss for the year and total comprehensive expense for the year (3,499) (1,971)
Attributable to:
Equity holders (3,514) (1,990)
Non-controlling interest 15 19
(3,499) (1,971)
Consolidated Statement of Financial Position as at
31 December 2024
2024 2023
Note £'000 £'000
Assets
Non-current
Goodwill and intangible assets 13 9,106 7,221
Property, plant and equipment 14 600 1,016
Right-of-use assets 19 948 443
10,654 8,680
Current assets
Inventories 15 139 63
Trade and other receivables 16 6,212 10,649
Cash and cash equivalents 17 6,270 4,948
12,621 15,660
Total assets 23,275 24,340
Equity
Called up share capital 25 30 28
Share premium account 25 10,544 9,546
Share-based payment reserve 25 715 547
Merger reserve 25 1,163 1,163
Retained losses 25 (8,990) (5,508)
Total equity attributable to equity holders of the parent 3,462 5,776
Non-controlling interests 18 21
Total equity 3,480 5,797
Liabilities
Non-current
Lease liabilities 19 509 57
Deferred tax 22 - -
Provisions 23 171 276
Trade and other payables 18 721 1,940
1,401 2,273
Current
Trade and other payables 18 14,316 12,282
Current tax liabilities 337 165
Borrowings 20 3,461 3,463
Lease liabilities 19 280 360
18,394 16,270
Total liabilities 19,795 18,543
Total equity and liabilities 23,275 24,340
The consolidated financial statements were authorised for issue and approved
by the Board on 29 April 2025 and are signed on its behalf by Will Sawyer.
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Company registration number: SC075133
Consolidated Statement of Cashflows for the year ended
31 December 2024
2024 2023
Note £'000 £'000
Cash flows from operating activities
Loss for the year before tax from continuing operations (1,380) (1,468)
Loss for the year before tax from discontinued operations (2,243) (495)
Adjustments for:
Depreciation 5 888 1,478
Amortisation and impairment of intangibles 5 456 462
Finance costs 9 344 385
Finance income 9 (26) (9)
Share-based payment charge 7 168 195
Loss/(profit) on disposal of fixed assets 13 (29)
Loss on disposal of trade and assets 11 1,098 -
Fees paid in shares 32 30
Remeasurement of deferred and contingent consideration payable 117 118
Remeasurement of lease liabilities 19 24 -
(509) 667
(Increase)/decrease in inventories (125) 10
Decrease/(increase) in trade and other receivables 2,971 (58)
(Decrease)/increase in trade and other payables (1,132) 2,876
Cash generated from operations 1,205 3,495
Interest received 26 9
Interest paid (301) (411)
Tax paid (145) -
Net cash flows generated from operating activities 785 3,093
Investing activities
Purchase of property, plant and equipment 14 (186) (505)
Purchase of intangible assets 13 (20) (12)
Proceeds from disposal of tangible fixed asset - 13
Acquisition of subsidiary net of cash acquired 24 1,147 -
Proceeds from disposal of trade and assets 11 100
Net cash flows generated from/(used in) investing activities 1,041 (504)
Financing activities
Principal elements of lease payments (523) (905)
Dividends paid to NCI (18) (14)
Contingent acquisition consideration paid - (327)
Net cash flows used in financing activities (541) (1,246)
Net increase in cash and cash equivalents 1,285 1,343
Translation differences 37 (27)
Cash and cash equivalents at beginning of year 17 4,948 3,632
Cash and cash equivalents at year-end 6,270 4,948
17
Consolidated Statement of Changes in Equity for the year ended 31 December
2024
Share Share Share- Merger Retained Total equity Non-controlling Total
based attributable
payment to equity
holders of
capital premium reserve reserve earnings the parent interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 27 9,546 457 566 (3,653) 6,943 16 6,959
Loss and total comprehensive expense for the year - - - - (1,990) (1,990) 19 (1,971)
Equity-settled share-based payments - - 90 - 105 195 - 195
Consideration paid in shares 1 - - 597 - 598 - 598
Directors' remuneration paid in shares - - - - 30 30 - 30
Dividends paid - - - - - - (14) (14)
Total transactions with owners of the Company 1 - 90 597 (1,855) (1,167) 5 (1,162)
At 31 December 2023 28 9,546 547 1,163 (5,508) 5,776 21 5,797
At 1 January 2024 28 9,546 547 1,163 (5,508) 5,776 21 5,797
Loss and total comprehensive expense for the year - - - - (3,514) (3,514) 15 (3,499)
Equity-settled share-based payments - - 168 - - 168 - 168
Consideration paid in shares 2 998 - - - 1,000 - 1,000
Directors' remuneration paid in shares - - - - 32 32 - 32
Dividends paid - - - - - - (18) (18)
Total transactions with owners of the Company 2 998 168 - (3,482) (2,314) (3) (2,317)
At 31 December 2024 30 10,544 715 1,163 (8,990) 3,462 18 3,480
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Zinc Media Group plc and its subsidiaries ("the Group") produce high quality
television and cross-platform content.
Zinc Media Group plc is the Group's ultimate parent and is a public listed
company incorporated in Scotland. The address of its registered office is
4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EN. Its shares are
traded on the AIM Market of the London Stock Exchange plc (LSE: ZIN).
The financial statements are presented in sterling (£), rounded to the
nearest thousand.
2. BASIS OF PREPARATION
The financial statements of the Group have been prepared in accordance with
UK-adopted-International Accounting Standards. The financial statements have
been prepared primarily under the historical cost convention, with the
exception of deferred and contingent consideration measured at fair value.
Areas where other bases are applied are identified in the accounting policies
below.
The Group's accounting policies have been applied consistently throughout the
Group to all the periods presented, unless otherwise stated.
2.1) Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group will be able to meet its liabilities as they fall due
for a period of at least 12 months from the date of signing of the financial
statements. The Group is dependent for its working capital requirements on
cash generated from operations, cash holdings, an overdraft facility,
long-term debt and from equity markets.
The Directors believe the Group has sufficient cash resources. As at 31
December 2024 the cash holdings of the Group were £6.3m and net cash was
£2.8m. The Group also has an overdraft facility of £1.2m available.
The Directors believe the Group has strong shareholder support, evidenced by
shareholders investing in new equity in recent years and the long-term debt
holders, who are also major shareholders with 39% of the Group's shares,
having agreed in Q1 2025 to extend the repayment date of the Group's long-term
debt from December 2025 to December 2027.
There are several factors which could materially affect the Group's cashflows,
including the underlying performance of the business and uncertainty regarding
the timing of receipts from customers. The Directors have prepared scenario
plans. The main variable is the run rate of new business. Whilst the sales
pipeline is healthy the timing of new sales is hard to predict, the scenarios
include revenues being over 10% down on budget. The Directors have reviewed
management's forecasts and scenarios under which cashflows may vary, including
mitigating actions if required, and remain confident that the Group will have
sufficient cash resources for a period of at least 12 months from issuing the
financial statements in these scenarios.
In light of the forecasts, the support provided by shareholders in recent
years and mitigating measures available to be used if needed, the Directors
believe that the going concern basis upon which the financial statements have
been prepared is reasonable.
2.2) Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Group and its subsidiaries as at 31 December 2024. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Generally, there is a presumption that a majority of
voting rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether
it has power over an investee.
Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated financial statements from the
date the Group gains control until the date the Group ceases to control the
subsidiary.
All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in
full on consolidation.
Non-controlling interests ("NCI") represents the share of non-wholly owned
subsidiaries' net assets that are not directly attributable to the
shareholders of the Group.
2.3) Adoption of new and revised standards
The following pronouncements were effective from 1 January 2024:
· Amendments to IAS 1 - Non-Current Liabilities with Covenants -
Amendments to IAS 1 and Classification of Liabilities as Current and
Non-Current (effective 1 January 2024);
· Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback
(effective 1 January 2024); and
· Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements
(effective 1 January 2024),
The following new standards, amendments and interpretations have not yet been
adopted:
· Amendments to IAS 21 - The Effects of Changes in Foreign Exchange
Rates - Lack of Exchangeability (effective 1 January 2025);
· IFRS9/IFRS 7 - Amendments to the Classification and Measurement
of Financial Instruments (effective 1 January 2026);
· Annual Improvements to IFRS Accounting Standards-Volume 11
(effective 1 January 2026);
· IFRS 18 - Presentation and disclosure in Financial Statements
(effective 1 January 2027); and
· IFRS19 - Subsidiaries without public Accountability: Disclosures
(effective 1 January 2027).
Management does not believe that any of these will have a material impact on
the Group.
3) ACCOUNTING POLICIES
3.1) Revenue
The Group recognises revenue to depict the transfer of promised goods or
services to customers at an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services.
Specifically, the Group follows these steps:
1. identify the contract with the customer;
2. identify the performance obligations in the contract;
3. determine the transaction price;
4. allocate the transaction price to the performance obligations in the
contract; and
5. recognise revenue when (or as) the entity satisfies a performance
obligation.
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for services provided in the
normal course of business, net of discounts and sales related taxes.
Revenue is recognised when the amount of revenue can be measured reliably, it
is probable that the economic benefits associated with the transaction will
flow to the entity, the costs incurred or to be incurred can be measured
reliably, and when the criteria for each of the Group's different activities
has been met.
Where productions are in progress at the year end and where the revenue
amounts invoiced exceed the value of work done the excess is shown as contract
liabilities; where the revenue recognised exceeds revenue invoiced the amounts
are classified as contract assets. The contract asset is transferred to
receivables when the entitlement to payment becomes unconditional. Where it is
anticipated that a production will make a loss, the anticipated loss is
provided for in full.
The accounting policies specific to the Group's key operating revenue
categories are outlined below:
TV production and content production revenue
Production revenue from contracts with broadcasters, brands and businesses
comprises work carried out to produce film and audio content. Contracts to
produce TV programmes include broadcaster licence fees. These are combined
performance obligations because the production and licence are indistinct, and
the licence is not the primary or dominant component of the combined
performance obligation. The Group considers the combined performance
obligation to be satisfied over time as it does not create an asset with an
alternative use at contract inception and the Group has an enforceable right
to payment for performance completed to date.
The Group recognises revenue over time by measuring the progress towards
complete satisfaction of the performance obligation, in line with transferring
control of goods or services promised to a customer. The Group transfers
control of the programme or content over time, and costs are incurred in line
with performance completed. The percentage of completion is calculated as the
ratio of the contract costs incurred up until the end of the period to the
total estimated cost.
TV distribution revenue
Distribution revenue comprises sums receivable from the exploitation of
programmes in which the Company owns rights and is received as advances and
royalties.
Advances are fixed sums receivable at the beginning of exploitation that are
not dependent on the sales performance of the programme. They are recognised
when all the following criteria have been met:
i) an agreement has been executed by both parties; and
ii) the programme has been delivered; and
iii) the licence period has begun.
Royalty revenue is dependent on the sales performance of the programme and is
recognised when royalty amounts are confirmed.
Publishing
Advertising revenue is recognised on the date publications are published which
is when control transfers to the customer. This revenue is included within the
content production segment.
3.2) Property, plant and equipment
Property, plant and equipment are stated at cost net of depreciation and any
provision for impairment.
Depreciation is calculated to write down the cost less estimated residual
value of all property, plant and equipment by equal annual instalments over
their expected useful lives. The rates generally applicable are:
Leasehold premises over the term of the
lease
Office equipment 10%-20% on cost
Computer equipment 20%-33% on cost
Motor vehicles 25% on cost
Useful economic lives are reviewed annually. Depreciation is charged on all
additions to, or disposals of, depreciating assets in the year of purchase or
disposal. Any impairment in values is charged to the income statement.
3.3) Intangible assets
Business combinations are accounted for by applying the acquisition method.
Goodwill represents the difference between the cost of the acquisition and the
fair value of the net identifiable assets acquired. Identifiable intangibles
are those which can be sold separately, or which arise from legal rights
regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
allocated to cash-generating units and is not amortised but tested annually
for impairment.
Goodwill arising on acquisitions is attributable to operational synergies and
earnings potential expected to be realised over the longer term.
The intangible assets other than goodwill are in respect of the customer
relationships, brand and distribution catalogue acquired in respect of the
acquisition of The Edge, Tern Television Productions and Raw Cut Ventures
Limited ("Raw Cut") and in each case, are amortised over the expected life of
the earnings associated with the asset acquired.
Brands, customer
relationships
Over 7 - 10 years
Distribution
catalogue
Over 5 years
Order
book
Over 4 years
Software
Over 2 years
Brands and customer relationships relate to the acquisition of Tern Television
Productions, The Edge and Raw Cut. They are amortised over a period of seven
to ten years. At 31 December 2024 there was nil remaining useful life for Tern
Television Productions, under nine years for The Edge and five to ten years
for Raw Cut (2023: under one year remaining for Tern Television Productions
and under ten years for The Edge).
The distribution catalogue intangible asset on the acquisition of Tern
Television Productions was amortised over five years and as at 31 December
2024 the remaining useful life was nil (2023: nil). It is amortised over
five years for Raw Cut with under five years remaining.
The order book intangible asset on the acquisition of Raw Cut is amortised
over four years with under four years remaining.
The software relates to a finance system that is used across the Group and
website improvements.
3.4) Leased assets
For any new contracts the Group considers whether a contract is, or contains,
a lease. A lease is defined as 'a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset) for a period of time
in exchange for consideration'. To apply this definition the Group assesses
whether the contract meets three key evaluations which are whether:
· The contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group; and
· The Group has the right to obtain substantially all the economic
benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract; and
· The Group has the right to direct the use of the identified asset
throughout the period of use. The Group assesses whether it has the right to
direct 'how and for what purpose' the asset is used throughout the period of
use.
At lease commencement date, the Group recognises a right-of-use asset and a
lease liability on the balance sheet. The right-of-use asset is measured at
cost, which is made up of the initial measurement of the lease liability, any
initial direct costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any incentives
received).
The Group depreciates the right-of-use assets on a straight-line basis from
the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term. The Group also assesses
the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the
interest rate implicit in the lease if that rate is readily available or the
Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up
of fixed payments, variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and payments arising
from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments
made and increased for interest. It is remeasured to reflect any reassessment
or modification.
When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or income statement if the right-of-use
is already reduced to zero. The Group has elected to account for short-term
leases and leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the payments in
relation to these are recognised as an expense in the income statement on a
straight-line basis over the lease term.
3.5) Inventories
Inventories in Zinc Communicate and The Edge comprise:
· Cumulative costs incurred in relation to unpublished titles or
events, less provision for future losses, and are valued based on direct costs
plus attributable overheads based on a normal level of activity. No element of
profit is included in the valuation of inventories.
· Inventories comprise costs of unsold publishing stock and costs
on projects that are incomplete at the year-end less any amounts recognised as
cost of sales.
3.6) Impairment of assets
For the purposes of assessing impairment, non-financial assets are grouped at
the lowest levels for which there are separately identifiable cash flows
(cash-generating units). As a result, some assets are tested individually for
impairment, and some are tested at the cash-generating unit level.
Goodwill is allocated to those cash generating units that are expected to
benefit from the synergies of the related business combination and represent
the lowest level within the Group at which management monitors the related
cash flows. Goodwill and other individual assets or cash-generating units are
tested for impairment annually or whenever events/changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the assets or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other
assets in the cash generating unit. Except for goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
3.7) Current and deferred taxation
Current tax is the tax currently payable based on taxable profit/(loss) for
the year.
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases.
Deferred tax is not recognised in respect of:
· the initial recognition of goodwill that is not tax deductible;
and
· the initial recognition of an asset or liability unless the
related transaction is a business combination or affects tax or accounting
profit. In addition, tax losses available to be carried forward as well as
other income tax credits to the Group are assessed for recognition as deferred
tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred
tax assets are recognised to the extent that it is probable that the
underlying deductible temporary differences will be able to be offset against
future taxable income. Current and deferred tax assets and liabilities are
calculated at tax rates and laws that are expected to apply to their
respective year of realisation, provided they are enacted or substantively
enacted at the reporting date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that
are charged or credited directly to equity in which case the related deferred
tax is also charged or credited directly to equity.
3.8) Financial instruments
Recognition of financial instruments
Financial assets and liabilities are recognised on the Group's Statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets
Initial and subsequent measurement of financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other
short-term deposits held by the Company with maturities of less than three
months.
Trade and other receivables
Trade receivables are initially measured at fair value. Other receivables are
initially measured at fair value plus transaction costs. Receivables are
subsequently measured at amortised cost using the effective interest rate
method.
Impairment of trade receivables
For trade receivables, expected credit losses are measured by applying an
expected loss rate to the gross carrying amount. The expected loss rate
comprises the risk of a default occurring and the expected cash flows on
default based on the aging of the receivable. The risk of a default
occurring always takes into consideration all possible default events over the
expected life of those receivables ("the lifetime expected credit losses").
Different provision rates and periods are used based on groupings of historic
credit loss experience by product type, customer type and location.
Impairment losses and any subsequent reversals of impairment losses are
adjusted against the carrying amount of the receivable and are recognised in
profit or loss.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities.
Initial and subsequent measurement of financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value, net of direct
transaction costs and subsequently measured at amortised cost.
Loan notes
Loan notes are initially recognised at fair value, adjusted for transaction
costs, and subsequently measured at amortised cost using the effective
interest rate method.
Finance charges, including premiums payable on settlement and direct issue
costs, are accounted for on an effective interest method and are added to the
carrying amount of the instrument to the extent that they are not settled in
the year in which they arise.
Contingent consideration
The acquisition-date fair value of any contingent consideration is recognised
as part of the consideration transferred by the Group in exchange for the
acquiree. Changes in the fair value of contingent consideration that result
from additional information obtained during the measurement period (maximum
one year from the acquisition date) about facts and circumstances that existed
at the acquisition date are adjusted retrospectively against goodwill. Other
changes resulting from events after the acquisition date are recognised in
profit or loss.
The Group assesses the fair value of contingent consideration liabilities on
an annual basis, taking into account changes in circumstances and updated
information regarding the probability and timing of payment. Any adjustments
to the fair value of contingent consideration liabilities are recognised as an
Adjusting Item in the income statement and changes due to discounting are
recognised in the income statements.
Equity instruments
Equity instruments issued by the Company are recorded at fair value on initial
recognition net of transaction costs.
Derecognition of financial assets (including write-offs) and financial
liabilities
A financial asset (or part thereof) is derecognised when the contractual
rights to cash flows expire or are settled, or when the contractual rights to
receive the cash flows of the financial asset and substantially all the risks
and rewards of ownership are transferred to another party.
When there is no reasonable expectation of recovering a financial asset it is
derecognised ("written off").
The gain or loss on derecognition of financial assets measured at amortised
cost is recognised in profit or loss.
A financial liability (or part thereof) is derecognised when the obligation
specified in the contract is discharged, cancelled or expires.
Any difference between the carrying amount of a financial liability (or part
thereof) that is derecognised, and the consideration paid is recognised in
profit or loss.
3.9) Employee benefits
Equity settled share-based payments
Where employees are rewarded using equity settled share-based payments, the
fair values of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee. This fair value is
appraised at the grant date and excludes the impact of non-market vesting
conditions.
All equity-settled share-based payments are ultimately recognised as an
expense in the income statement with a corresponding credit to reserves.
If vesting periods apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected
to vest. Estimates are revised subsequently if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised in the
current year. No adjustment is made to any expense recognised in prior years
if share options that have vested are not exercised.
Retirement benefits
Obligations for contributions to defined contribution pension plans are
recognised as an expense in the income statement when they are due.
3.10) Provisions
Provisions are recognised when: the Group has a present legal or constructive
obligation as a result of past events; it is probable that an outflow of
resources will be required to settle the obligation; and the amount can be
reliably estimated.
Provisions are measured at the present value of the expenditures expected to
be required to settle the obligation using a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific
to the obligation. Any increase in the provision due to the passage of time
is recognised as interest expense.
3.11) Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange
ruling at the balance-sheet date and the gains or losses on translation are
included in the income statement.
3.12) Significant judgements and estimates
The preparation of consolidated financial statements in accordance with
UK-adopted International Accounting Standards requires the Group to make
estimates and assumptions that affect the application of policies and reported
amounts. Estimates and judgements are continually evaluated and are based on
historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates. The estimates and assumptions which
have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities are discussed below.
i) Judgements
Revenue recognition
The main judgements regarding revenue recognition relate to TV production and
content production revenue. The Group considers the production and licence
elements to be a combined performance obligation to be satisfied and
recognised over time. This is explained in note 3.1.
ii) Estimates
Impairment of goodwill and intangible assets
The Group is required to test, at least annually, whether goodwill has
suffered any impairment. The recoverable amount is determined based on value
in use calculations. The use of this method requires the estimation of future
cashflows and the choice of a suitable discount rate to calculate the present
value of these cashflows. Actual outcomes could vary. See note 13 for details
of how these judgements are made and the estimation sensitivities disclosed.
Valuation of contingent consideration
The contingent consideration payable in relation to the acquisition of The
Edge has been measured at its fair value using a Monte Carlo simulation where
the EBIT for years 1 and 2 is based on actual performance and each of the
remaining year of the earn out period is an independent, normally distributed
random variable. Values have been calculated for all three years and in total
and the average represents the fair value. Estimated sensitivity has been
disclosed in note 21.
The contingent consideration payable in relation to the acquisition of Raw Cut
has been measured at its fair value using a Monte Carlo simulation where the
EBITDA for years 1 and 2 is an independent, normally distributed random
variable. Values have been calculated for both years and in total and the
average represents the fair value. Estimated sensitivity has been disclosed in
note 21.
Valuation of intangibles arising on acquisition
The intangible assets acquired on the acquisition of Raw Cut Ventures Limited
have been valued using the income approach. This involves forecasting the
expected future economic benefits attributable to an asset and calculating the
net present value of these future economic benefits using an appropriate asset
specific discount rate. The discount rate used has factored in the market
value of return, the specific risks associated with the industry as well as
the risk associated with the asset being valued. See note 24 for more detail
on the acquisition.
3.13) Segmental reporting
In identifying its operating segments, Management follows the Group's service
lines, which represent the main products and services provided by the Group.
The activities undertaken by the TV segment include the production of
television content. The Content Production segment includes brand and
corporate film production, and radio and podcast production.
Each of these operating segments is managed separately as each service line
requires different resources as well as marketing approaches. All
inter-segment transfers are carried out at arm's length prices.
The measurement policies the Group uses for segment reporting under IFRS 8 are
the same as those used in its financial statements.
4) SEGMENTAL INFORMATION AND REVENUE
Segmental information
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the board of Directors, who categorise the Group's two service
lines as two operating segments: Television and Content Production. These
operating segments are monitored, and strategic decisions are made on the
basis of adjusted segment operating results.
TV Content Production Central and plc Total
2024 2023 2024 2023 2024 2023 2024 2023
Restated Restated Restated Restated
Continuing operations £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 20,250 24,122 12,058 12,511 - - 32,308 36,633
Adjusted EBITDA* 1,627 2,155 1,769 1,141 (1,886) (1,891) 1,510 1,405
Depreciation (391) (527) (216) (702) (245) (223) (852) (1,452)
Amortisation - - - - (446) (431) (446) (431)
Adjusting items and acquisition costs (1,026) (29) (75) (42) 11 (152) (1,090) (223)
Operating profit/(loss) 210 1,599 1,478 397 (2,566) (2,697) (878) (701)
Finance costs (13) (3) (7) - (508) (773) (528) (776)
Finance income 5 3 9 5 12 1 26 9
Profit/(loss)before tax 202 1,599 1,480 402 (3,062) (3,469) (1,380) (1,468)
Taxation credit/(charge) 31 (47) (193) (3) 996 103 834 53
Profit/(loss) for the year 233 1,552 1,287 399 (2,066) (3,366) (546) (1,415)
Segment assets 5,916 7,156 6,264 8,974 11,095 8,210 23,275 24,340
Segment liabilities (8,805) (7,126) (2,439) (3,650) (8,551) (7,767) (19,795) (18,543)
Other segmental items:
Expenditure on intangible assets - - - - 20 - 20 -
Expenditure on tangible assets 942 416 52 326 25 51 1,019 793
* Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortisation and adjusting items as set out in note 8.
Items included under 'Central and plc' do not constitute an operating segment
and relate mainly to Group activities based in the United Kingdom. Central and
plc costs relate to Directors, support functions and costs resulting from
being listed.
The internal reporting of the Group's performance does not require that costs
and/or Statement of financial position information is gathered based on the
geographical streams.
The Group's principal operations are in the United Kingdom. Its revenue from
external customers in the United Kingdom for the year was £16.9m (2023:
£30.9m), and the total revenue from external customers in other countries was
£15.4m (2023: £9.3m). There were three customers that accounted for more
than 10% of Group revenue in the year: one customer accounted for £4.8m or
15% of Group revenue, one for £4.7m or 14% of Group revenue and one for
£4.0m or 12% of Group revenue (2023: one customer accounted for £9.1m or 23%
of Group revenue and the other customer accounted for £6.4m or 16% of Group
revenue). Within these three customers there are multiple separate buyers and
commissioners with separate budgets, and the customers are multi-billion pound
blue-chip organisations.
Non-current assets are all located in the Group's country of domicile.
Revenue
Contract balances
The following table provides information about receivables, contract assets
and contract liabilities from contracts with customers.
2024 2023
£'000 £'000
Receivables, which are included in Trade and other receivables 3,180 6,216
Contract assets 1,399 2,976
Contract liabilities (4,196) (4,485)
The contract assets primarily relate to the Group's rights to consideration
for work completed but not billed at the reporting date on contracts with
customers. The contract assets are transferred to receivables when the
milestones per the production agreements are met and an invoice is raised. The
contract liabilities primarily relate to the advance consideration received
from customers for production related contracts, for which revenue is
recognised on the percentage stage of completion of the production.
Significant changes in the contract assets and the contract liabilities
balances during the year are as follows.
2024
Contract Contract
assets liabilities
£'000 £'000
At 1 January 2024 2,976 (4,485)
Revenue recognised that was included in the contract liability balance at the - 4,485
beginning of the period
Increases due to cash received, excluding amounts recognised as - (4,196)
revenue during the period
Transfers from contract assets recognised at the beginning of the (2,976) -
period to receivables
Increases as a result of changes in measure of progress 1,399 -
At 31 December 2024 1,399 (4,196)
Transaction price allocated to the remaining performance obligations
The Group has applied the practical expedient in paragraph 121 of IFRS 15 and
chosen not to disclose information relating to performance obligations for
contracts that had an original expected duration of one year or less, or where
the right to consideration from a customer is an amount that corresponds
directly with the value of the completed performance obligations.
5) EXPENSES BY NATURE
Costs from continuing operations consist of:
2024 2023
Restated
£'000 £'000
Cost of sales
Production costs 16,062 19,507
Salary costs 1,656 2,038
Royalties and distribution costs 198 1,018
Total cost of sales 17,916 22,563
Operating expenses
Salary costs 9,686 9,540
Leases on premises 21 10
Other administrative expenses 3,216 3,112
Foreign exchange (gain)/loss (41) 3
Adjusting items (note 8) 1,090 223
Depreciation and amortisation 1,298 1,883
Total operating expenses 15,270 14,771
Auditor, tax and share option advisor fees are included in other
administrative expenses. The auditor did not provide any non-audit services in
the current or prior year. The fee for statutory audit services was as
follows:
2024 2023
£'000 £'000
Statutory audit services
Annual audit of the Company and the consolidated accounts 228 180
6) STAFF COSTS
Staff costs from continuing operations, including Directors, consist of:
2024 2023
£'000 £'000
Wages and salaries 10,438 12,688
Social security and other costs 1,168 1,273
Pension costs 500 505
Share-based payment charge 168 195
Consideration paid in shares 32 30
Total 12,306 14,691
The average number of employees (including Directors) employed by the Group
for continuing operations during the year was:
2024 2023
Zinc Television 118 146
Content Production 56 126
Central and plc 12 11
Total 186 283
The Directors consider that the key management comprises the Directors of the
Company, and their emoluments are set out below:
Directors' emoluments
Salaries Bonus Shares Pension 2024 Total 2023 Total
And issued remuneration remuneration
fees in lieu received by received by
of fees Directors Directors
£'000 £'000 £'000 £'000 £'000 £'000
Executive Directors
Mark Browning 370 140 - 37 547 485
Will Sawyer 180 80 - 18 278 330
Non-executive Directors
Christopher Satterthwaite (Chairman) 50 - 34 - 84 80
Nicholas Taylor 20 - - 11 31 30
Andrew Garard 34 - - - 34 30
Kathryn Herrick 9 - - - 9 -
663 220 34 66 983 955
The CEO bonus potential is set at 100% of base salary, and the CFO bonus at
70% of base salary. Financial performance targets are set at the start of each
financial year. The CEO and CFO have waived their agreed annual in year bonus
payment for the second year running due to continued headwinds in the UK
production market and to ensure the Group continues to perform in line with
market expectations. For FY25 this was due to be paid upon delivery of the
Group's EBITDA performance. The remuneration committee has insisted that
executive Directors receive part of their bonus for the delivery of the
Group's portfolio restructuring and acquisition, which was delivered in FY24.
The prior year total includes £105k of tax paid by the Company on behalf of
Directors that arose on the exercise of Enterprise Management Incentives
("EMI") share options in line with the terms of the share options granted to
Directors in 2020 and may otherwise have been funded by the Directors' selling
shares.
Key management personnel compensation
2024 2023
£'000 £'000
Short term employee benefits (includes employers NICs) 997 866
Post-employment benefits 66 57
Shares (includes employers NICs) 39 34
Share-based payments charge 110 122
Total 1,212 1,079
The amount for share-based payments charge (see note 7) which relates to the
Directors was £110k
(2023: £122k).
7) SHARE-BASED PAYMENTS
The charge for share-based payments arises from the following schemes:
2024 2023
£'000 £'000
EMI share option scheme 77 121
Unapproved share option scheme 91 74
Total 168 195
The share-based payment charge for options granted since February 2020 are
calculated using a Stochastic model and options granted prior to February 2020
have been valued using the Black Scholes model.
Share options held by Directors are disclosed in the Directors' report.
Share option schemes
Under the terms of the EMI and unapproved share option schemes, the Board may
offer options to purchase ordinary share options to employees and other
individuals. Share options granted under the Group's schemes are normally
exercisable for a ten-year period. The vesting period is from the date of
grant up to ten years. Some of the EMI share options and unapproved share
options have market criteria that mean they only vest if the share price is at
a minimum level at that point.
Details of the number of share options and the weighted average exercise price
("WAEP") outstanding during the year are as follows:
Unapproved share option scheme
2024 2023
Number WAEP £ Number WAEP £
Outstanding at the beginning of the year 913,151 0.033 913,151 0.033
Transferred from EMI scheme - - - -
Granted 507,187 0.001 - -
Lapsed during the year - - - -
Outstanding at the end of the year 1,420,338 0.022 913,151 0.033
Exercisable at the end of the year 471,878 - 171,201 0.033
EMI Share option scheme
2024 2023
Number WAEP £ Number WAEP £
Outstanding at the beginning of the year 880,837 0.555 1,151,909 0.428
Granted during the year 204,158 0.001 - -
Lapsed during the year (22,806) 0.540 (1,000) 3.750
Transferred to unapproved scheme - - - -
Exercised during the year - - (270,073) 0.001
Outstanding at the end of the year 1,062,189 0.439 880,837 0.555
Exercisable at the end of the year 236,072 - -
The options outstanding as at 31 December 2024 have the following exercise
prices and expire in the following financial years:
Expiry Grant Date Exercise Price 2024 2023
£ No. No.
December 2026 December 2016 3.75 4,000 4,000
November 2027 November 2017 3.75 4,000 5,000
April 2028 April 2018 4.15 4,000 4,000
November 2028 November 2018 2.00 6,000 6,000
February 2030 February 2020 0.0013 441,273 441,273
June 2031 June 2021 0.0013 711,345 711,345
June 2031 June 2021 0.6695 268,237 268,237
November 2031 November 2021 0.7060 202,511 202,511
December 2032 December 2022 0.8750 129,816 151,622
December 2034 August 2024 0.0013 711,345
2,482,527 1,793,988
During the year, no options were exercised (2023: 270,073 EMI options were
exercised by two Directors); the aggregate amount of gains on the shares
exercised by the Directors was £nil (2023: £221k).
Options are forfeited at the discretion of the Board if an employee leaves the
Group before the options vest. The Share Option Plan provides for the grant of
both tax-approved Enterprise Management Incentives ("EMI") options and
unapproved options. The model used to calculate a share option charge involves
using several estimates and judgements to establish the appropriate inputs,
covering areas such as the use of an appropriate interest rate and dividend
rate, exercise restrictions and behavioural considerations. A significant
element of judgement is therefore involved in the calculation of the charge.
8) ADJUSTING ITEMS
2024 2023
Restated
£'000 £'000
Continuing adjusting items
Reorganisation and restructuring costs (129) (82)
Acquisition costs (847) (80)
Share-based payment charge (168) (195)
(Loss)/gain on disposal of tangible assets (13) 29
Tax arising on share options paid by the Company - (267)
Change in fair value of contingent consideration in respect of The Edge 67 372
Total (1,090) (223)
2024 2023
Restated
£'000 £'000
Discontinued adjusting items
Loss on disposal of trade and assets (note 11) (1,386) -
Reorganisation and restructuring costs (note 11) (209) (39)
Total (1,595) (39)
Adjusting items are presented separately as, due to their nature or for the
infrequency of the events giving rise to them, this allows shareholders to
understand better the elements of financial performance for the year, to
facilitate comparison with prior years and to assess better the trends of
financial performance.
Reorganisation and restructuring costs
Management made changes to operational roles across the Group to improve
efficiency and decision making. The non-recurring element of the costs has
been presented as adjusting to enable a more refined evaluation of financial
performance.
Acquisition costs
Acquisition costs represent costs incurred in the acquisition of Raw Cut
Ventures Limited. These costs are non-recurring in nature and are therefore
treated as an adjusting item for management to better understand the
underlying performance of the Group during the year. These costs are included
in operating activities in the cashflow statement.
Change in fair value of The Edge contingent consideration
The contingent consideration in respect of The Edge acquisition has been
remeasured based on latest forecasts. The Edge's base earnout targets are
forecast to be exceeded.
Share-based payment charge
This represents the expense recognised by the Group in relation to services
received from employees following the grant of share options.
Tax on share options
The tax paid by the Company on behalf of Directors arose on the exercise of
EMI share options in line with the terms of the share options granted to
Directors in 2020 and may otherwise have been funded by the Directors' selling
shares.
Loss on disposal of trade and assets
This represents the loss incurred on the disposal of the trade and assets of
the Publishing division of Zinc Communicate. These costs are non-recurring in
nature and are therefore treated as an adjusting item for management to better
understand the underlying performance of the Group during the year. These
costs are included within discontinued operations in operating activities in
the cashflow statement.
9) FINANCE COSTS
2024 2023
Finance costs £'000 £'000
Interest payable on borrowings (306) (347)
Interest on unwinding of present value of contingent consideration (184) (387)
Interest due to bank charges - (5)
Interest payable on lease liabilities (38) (37)
Finance costs (528) (776)
Finance income
Interest received 26 9
Net finance costs (502) (767)
10) INCOME TAX EXPENSE
Taxation credit
2024 Restated
2023
£'000 £'000
Current tax credit on continuing operations:
Current tax credit 169 4
Credit in respect of prior periods 158 4
327 8
Deferred tax
Origination and reversal of temporary differences (1,161) (60)
Effect of change in UK corporation tax rate - (1)
Adjustments in respect of prior periods - -
(1,161) (61)
Total income tax credit (834) (53)
Reconciliation of taxation credit:
2024 2023
£'000 £'000
Loss before tax (1,380) (1,468)
Taxation credit at UK corporation tax rate of 25% (2023: 23.5%) (345) (345)
Other non-taxable non-deductible expenses/(income) 1,906 (17)
Income not taxable in determining taxable loss (1,527) -
Tax losses not recognised - 305
Group relief claimed (399) -
Temporary timing differences 34 -
Overseas tax (3) -
Adjustments to tax charge in respect of previous years 58 4
Charge in respect of prior periods 100 -
Movement in deferred tax not recognised (658) -
Total income tax credit (834) (53)
The corporation tax rate increased to 25% in April 2023, a rate of 19% was
therefore used for the first three months of financial year 2023, with 25%
being used for nine months of the year, to give an average for the full year
of 23.5% in 2023.
11) DISCONTINUED OPERATIONS
In July 2024, the operations of the Video Marketing and Branded Content
division of Zinc Communicate were discontinued and in September 2024, the
trade and assets of the Publishing division of Zinc Communicate were sold.
These were previously part of the Content Productions operating segment of the
Group
(see note 4).
Losses from discontinued operations are as follows:
2024 2023
£'000 £'000
Revenue 1,776 3,592
Expenses (2,369) (3,991)
Adjusted EBIDTA loss (593) (399)
Loss on disposal of trade and assets (note 8) (1,386) (39)
Reorganisation and restructuring costs (note 8) (209) -
Amortisation and depreciation (55) (57)
Loss before tax from discontinued operations (2,243) (495)
Income tax (710) (61)
Loss after tax from discontinued operations (2,953) (556)
The loss relating to the discontinuation of this operating segment has been
eliminated from profit or loss from the Group's continuing operations and is
shown as a single line item in the Consolidated income statement.
The prior year comparative Consolidated income statement and related notes
have been restated to show only operations classified as continuing.
12) EARNINGS PER SHARE
Basic earnings/(loss) per share ("EPS") for the period is calculated by
dividing the loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during
the year.
When the Group makes a profit from continuing operations, diluted EPS equals
the profit attributable to the Company's ordinary shareholders divided by the
diluted weighted average number of issued ordinary shares. When the Group
makes a loss from continuing operations, diluted EPS equals the loss
attributable to the Company's ordinary shareholders divided by the basic
(undiluted) weighted average number of issued ordinary shares. This ensures
that EPS on losses is shown in full and not diluted by unexercised share
options or awards.
2024 2023
Number of shares Number of shares
Weighted average number of shares used in basic and diluted earnings per share 23,021,816 21,985,965
calculation
Potentially dilutive effect of share options 1,431,808 1,269,782
£'000 Restated
£'000
Loss for the year from continuing operations attributable to shareholders (561) (1,434)
Loss for the year from discontinued operations attributable to shareholders (2,953) (556)
Continuing operations
Basic loss per share (pence) (2.44)p (6.52)p
Diluted loss per share (pence) (2.44)p (6.52)p
Discontinued operations
Basic loss per share (pence) (12.83)p (2.53)p
Diluted loss per share (pence) (12.83)p (2.53)p
13) INTANGIBLE ASSETS
Goodwill Brands Customer Distribution Order Total
relationships Software catalogue book
£'000 £'000 £'000 £'000 £'000 £'000 £000
Cost
At 31 December 2022 10,456 2,143 4,753 18,194
280 443 119
Additions - - - 12 - - 12
At 31 December 2023 10,456 2,143 4,753 18,206
292 443 119
Additions - - - 20 - - 20
Acquired through business combinations 1,057 721 229 - 267 67 2,341
Disposals and retirements - - - (61) - - (61)
At 31 December 2024 11,513 2,864 4,982 251 710 186 20,506
Amortisation and impairment
At 31 December 2022 (5,898) (681) (3,143) (10,523)
(239) (443) (119)
Charge for the year - (172) (259) - (462)
(31) -
At 31 December 2023 (5,898) (853) (3,402) (10,985)
(270) (443) (119)
Charge for the year - (180) (257) (7) (9)- (3) (456)
Disposals and retirements - - - 41 - - 41
At 31 December 2024 (5,898) (1,033) (3,659) (236) (452) (122) (11,400)
Net Book Value
At 31 December 2024 5,615 1,831 1,323 15 258 64 9,106
At 31 December 2023 4,558 1,290 1,351 - - 7,221
22
Impairment Tests for Goodwill
Goodwill by cash generating unit ("CGU") is:
2024 2023
£'000 £'000
Tern TV CGU 1,444 1,444
London and Manchester TV CGU 1,611 1,611
The Edge CGU 1,503 1,503
Raw Cut CGU 1,057 -
Total 5,615 4,558
Goodwill is not amortised but tested annually for impairment with the
recoverable amount being determined from value in use calculations. The key
assumptions for the value in use calculations are those regarding the discount
rate, growth rates, gross margins and forecasts in new business.
The Group assessed whether the carrying value of goodwill was supported by the
discounted cash flow forecasts of each operating segment based on financial
forecasts approved by management, taking into account both past performance
and expectations for future market developments. Management has used a
perpetuity model (5-year Group forecast and GDP growth rate in perpetuity).
Management estimates the discount rate using a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific
to media businesses.
The 2025 business unit forecasts are based on the budget set for the year.
In TV a growth rate of 2 per cent has been used for the following years into
perpetuity. Management believes the 2 per cent growth rate is a cautious
assumption which may be significantly lower than the growth rate management
would expect to achieve.
In evaluating the recoverable amount, the discounted cash flow methodology has
been employed, which is based on assumptions and judgements related to
forecasts, margins, discount rates and working capital needs. These estimates
will differ from actuals in the future and could therefore lead to material
changes to the recoverable amounts. The key assumptions used for estimating
cashflow projections in the Group's impairment testing are those relating to
EBITDA growth, which take account of the businesses' expectations for the
projection period. These expectations consider the macroeconomic environment,
industry and market conditions, the unit's historical performance and any
other circumstances particular to the unit, such as business strategy and
client mix.
The cash generating units operate in a similar media landscape and the pre-tax
discount rate applied across the segments for period ended 31 December 2024
was 13.3 per cent (2023: 12.9 per cent). A sensitivity analysis of an increase
in the discount rate by 1 per cent is shown below.
Changes in assumptions can have a significant effect on the recoverable amount
and therefore the value of the impairment recognised.
Assumption Judgement Sensitivity
Discount rate As indicated above the rate used is 13.3 per cent. An increase in the discount rate to 14.3 per cent will result in no impairment
charge.
Revenue TV's, Raw Cut's and The Edge CGU revenue for 2025 is forecast to increase. If there is a 20% shortfall in production revenue versus FY25 forecasts and
associated production overhead savings are made there would be no impairment
charge, and if no production overhead savings are made then a 10% shortfall in
production revenue would result in no impairment charge.
EBITDA growth rate An average rate of 2 per cent has been used for financial year 2026 onwards. If a zero per cent average growth rate was applied for 2026 onwards there
would be no impairment in any of the CGU's.
Sensitivity analysis using reasonable variations in the assumptions shows no
indication of impairment.
14) PROPERTY, PLANT AND EQUIPMENT
Short Motor Office and Total
leasehold land vehicles computer
and buildings equipment
£'000 £'000 £'000 £'000
Cost
At 31 December 2022 448 21 2,113 2,582
Additions - - 505 505
Disposals and retirements - - (29) (29)
At 31 December 2023 448 21 2,589 3,058
Additions 16 - 170 186
Acquired through business combinations - - 22 22
Disposals and retirements (8) - (104) (112)
At 31 December 2024 456 21 2,677 3,154
Depreciation
At 31 December 2022 (263) (14) (1,249) (1,526)
Charge for the period (78) (2) (463) (543)
Disposals and retirements - - 27 27
At 31 December 2023 (341) (16) (1,685) (2,042)
Charge for the period (80) (1) (479) (560)
Disposals and retirements 2 - 46 48
At 31 December 2024 (419) (17) (2,118) (2,554)
Net book value
At 31 December 2024 37 4 559 600
At 31 December 2023 107 5 904 1,016
15) INVENTORIES
2024 2023
£'000 £'000
Work in progress 139 63
Total Inventories 139 63
16) TRADE AND OTHER RECEIVABLES
2024 2023
£'000 £'000
Current
Trade receivables 3,180 6,453
Less provision for impairment - (237)
Net trade receivables 3,180 6,216
Prepayments 621 574
Other receivables 1,012 883
Contract assets 1,399 2,976
Total 6,212 10,649
The carrying amount of trade and other receivables approximates to their fair
value. The creation and release of provision for impaired receivables have
been included in administration expenses in the income statement.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of asset above. The Group does not hold any collateral as
security for trade receivables. The Group is not subject to any significant
concentrations of credit risk.
There is no expected credit loss in relation to contract assets recognised
because the measure of expected credit losses is not material to the financial
statements.
Impairment of financial assets
The Group's credit risk management practices and how they relate to the
recognition and measurement of expected credit losses are set out below.
Definition of default
The loss allowance on all financial assets is measured by considering the
probability of default.
Receivables are considered to be in default when the principal or any interest
is significantly more than the associated credit terms past due, based on an
assessment of past payment practices and the likelihood of such overdue
amounts being recovered.
Write-off policy
Receivables are written off by the Group when there is no reasonable
expectation of recovery, such as when the counterparty is known to be going
bankrupt, or into liquidation or administration.
Impairment of trade receivables and contract assets
The Group calculates lifetime expected credit losses for trade receivables
using a portfolio approach. Receivables are grouped based on the credit
terms offered and the type of product sold. The probability of default is
determined at the year-end based on the aging of the receivables and
historical data about default rates on the same basis. That data is adjusted
if the Group determines that historical data is not reflective of expected
future conditions due to changes in the nature of its customers and how they
are affected by external factors such as economic and market conditions.
A loss allowance of £nil (2023: £237,000) was recognised for trade
receivables in the Zinc Communicate division due to the operations having been
wound down or sold during the year.
In relation to the Television division, the Directors do not believe there are
any other forward-looking factors to consider in calculating the loss
allowance provision as at 31 December 2024 (2023: £nil). No expected loss
provision has been recognised as the Directors expect any loss to be
immaterial.
No expected credit loss is expected for contract assets (2023: £nil).
Television 2024
Trade receivables: Aging 30-60 60-90 90-120 120-150 150-365 Over Total
0-30 days days days days days 365 2024
days days
Gross carrying amount (£'000) 1,155 408 144 3 - 5 35 1,750
Loss allowance provision (£'000) - - - - - - - -
The expected credit loss in this division is immaterial in line with the prior
year.
Television 2023
Trade receivables: Aging 30-60 60-90 90-120 120-150 150-365 Over Total
0-30 days days days days days 365 2023
days days
Gross carrying amount (£'000) 502 493 162 3 - 58 27 1,245
Loss allowance provision (£'000) - - - - - - - -
Content Production 2024
Trade receivables: Aging 30-60 60-90 90-120 120-150 150-365 Over Total
0-30 days days days days days 365 2024
days days
Gross carrying amount (£'000) 739 388 134 14 2 14 139 1,430
Loss allowance provision (£'000) - - - - - - - -
The expected credit loss in this division is immaterial in line with the prior
year.
Content Production 2023
Trade receivables: Aging 30-60 60-90 90-120 120-150 150-365 Over Total
0-30 days days days days days 365 2023
days days
Gross carrying amount (£'000) 1,669 915 376 186 53 144 83 3,426
Loss allowance provision (£'000) - - - - - - -
-
Zinc Communicate - Publishing "Building Control Communications" division 2023
Trade receivables: Aging 30-60 60-90 90-120 120-150 150-365 Over 365 Total
0-30 days days days days days days 2023
days
Expected loss rate (%) 3% 5% 8% 11% 13% 19% 32% 13%
Gross carrying amount (£'000) 162 47 96 30 110 590 1,390
355
Loss allowance provision (£'000) 6 6 10 6 31 174 237
4
Zinc Communicate - All other divisions 2023
Trade receivables: Aging 30-60 days 60-90 days 90-120 days 120-150 days 150-365 days Over 365 days Total 2023
0-30 days
Gross carrying amount (£'000) 107 158 18 - - - 392
109
Loss allowance provision (£'000) - - - - - - -
-
Movements in the impairment allowance for trade receivables are as follows:
2024 2023
£'000 £'000
Opening provision for impairment of trade receivables 237 380
Increase during the year 38 198
Receivables transferred on the sale of trade and assets (see note 11) (263)
Receivables written off during the year as uncollectible (12) (341)
Movement in provision for impairment during the year (237) (143)
At 31 December - 237
17) CASH AND CASH EQUIVALENTS
2024 2023
£'000 £'000
Total cash and cash equivalents 6,270 4,948
The Group's credit risk exposure in connection with the cash and cash
equivalents held with financial institutions is managed by holding funds in a
high credit worthy financial institution (Moody's A1- stable).
18) TRADE AND OTHER PAYABLES
2024 2023
£'000 £'000
Current
Trade payables 1,276 1,150
Other payables 175 130
Other taxes and social security 1,321 1,479
Accruals 4,360 4,646
Contract liabilities 4,196 4,485
Deferred and contingent consideration payable 2,988 392
Total 14,316 12,282
Non-current
Contingent consideration payable 721 1,940
Total 15,037 14,222
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value. The Group's payables are unsecured.
19) LEASES
Right-of-use assets
Short leasehold land and buildings Office and computer equipment Total
£'000 £'000 £'000
At 1 January 2023 1,017 67 1,084
Additions 295 - 295
Depreciation (869) (67) (936)
At 31 December 2023 443 - 443
Additions 833 - 833
Depreciation (328) - (328)
At 31 December 2024 948 - 948
Lease liabilities are presented in the statement of financial position as
follows:
2024 2023
£'000 £'000
Current 280 360
Non-current 509 57
Total lease liabilities 789 417
The Groups future minimum lease payments are as follows:
2024 2023
£'000 £'000
Not later than one year 342 371
Later than one year and not later than five years 604 50
Later than five years - -
946 421
20) BORROWINGS AND OTHER FINANCIAL LIABILITIES
2024 2023
£'000 £'000
Current
Lease liabilities 280 360
Debt facility - unsecured borrowings 2,483 2,485
Loan notes - unsecured borrowings 978 978
Sub total 3,741 3,823
Non-current
Debt facility - unsecured borrowings - -
Loan notes - unsecured borrowings - -
Lease liabilities 509 57
Sub total 509 57
Total 4,250 3,880
Maturity of financial liabilities
The maturity of borrowings (analysed by remaining contractual maturity) is as
follows:
2024 2023
£'000 £'000
Repayable within one year and on demand:
Lease liabilities 342 371
Trade and other payables 1,451 1,280
Accrued expenses 4,360 4,646
Debt facility - unsecured 2,599 2,682
Loan notes - unsecured 1,111 1,111
Deferred and contingent consideration 2,988 392
12,851 10,482
Repayable between one and two years:
Lease liabilities 194 50
Debt facility - unsecured - -
Loan notes - unsecured - -
Contingent consideration 721 1,940
915 1,990
Repayable between two and five years:
Lease liabilities 410 -
Contingent consideration - -
410 -
Total 14,176 12,472
Debt facility
Loans totalling £2.5m (2023: £2.5m) are held by Herald Investment Trust Plc
and The John Booth Charitable Foundation ("JBCF"), all of whom are a related
party through shareholding. During the year, the interest on the facility is
based on monthly SONIA plus a margin of 4%, subject to a floor of RPI. There
are no financial covenants in force in respect of this debt facility. The debt
facility is unsecured and at year end was repayable in full on 31 December
2025. Post year end, Herald Investment Trust plc and the JBCF agreed to extend
the repayment date to 31 December 2027 on the same terms.
Loan notes - unsecured
The unsecured loan notes of £1.0m (2023: £1.0m) relates to short-term loan
notes issued to Herald Investment Trust plc, a related party through
shareholding. Interest during the year was at a fixed rate of 8%. At year end
the interest was accrued and was repayable along with the principal on 31
December 2025. Post year end, Herald Investment Trust plc agreed to extend the
repayment date to 31 December 2027, with the interest rate remaining
unchanged. There are no financial covenants in place in respect of this debt.
Finance leases
Net obligations under finance leases are secured on related property, plant
and equipment and are included within lease liabilities.
Overdraft
The Group has an overdraft facility of £1,200,000, which is secured over the
assets of subsidiary companies and requires coverage of 3.5 times the value of
UK debtors less than 90 days old. During the year the Group has not drawn upon
the overdraft facility in place. The interest rate on the overdraft is 5.3%
per annum over the Bank of England rate.
Net debt reconciliation
2024 2023
£'000 £'000
Cash and cash equivalents (note 17) 6,270 4,948
Lease liabilities (note 20) (789) (417)
Debt facility and loan notes - unsecured borrowings (note 20) (3,461) (3,463)
Net debt 2,020 (1,068)
Change in liabilities arising from financing activities
2023 Cashflows Interest Interest Non-cash 2024
charged paid changes
£'000 £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 4,948 1,322 - - - 6,270
Borrowings - debt facility (2,485) - (220) 222 - (2,483)
Borrowings - loan notes (978) - (78) 78 - (978)
Lease liabilities (417) 523 (43) 43 (895) (789)
Total liabilities from financing activities 1,068 1,845 (341) 343 (895) 2,020
Non-cash changes predominantly relate to the inception of new leases arising
during the year.
21) FINANCIAL INSTRUMENTS
The Group's financial instruments comprise borrowings, cash and liquid
resources and various items, such as trade and other receivables and trade and
other payables that arise directly from its operations. The main purpose of
these financial instruments is to raise finance for the Group's operations.
The principal financial risk faced by the Group is liquidity/funding. The
policies and strategies for managing this risk is summarised as follows:
Risk Potential impact How it is managed
Liquidity The Group's debt servicing requirements and investment strategies, along with The Group's treasury function is principally concerned with internal funding
the diverse nature of the Group's operations, means that liquidity management requirements, debt servicing requirements and funding of new investment
is recognised as an important area of focus. strategies.
Liquidity issues could have a negative reputational impact, particularly with Internal funding and debt servicing requirements are monitored on a continuing
suppliers. basis through the Group's management reporting and forecasting. The Group
also maintains a continuing dialogue with the Group's lenders as part of its
information covenants. The requirements are maintained through a combination
of retained earnings, asset sales or capital markets.
An overdraft of £1.2m is in place to help fund potential working capital
fluctuations.
New investment strategies are to be funded through existing working capital or
where possible capital markets.
Capital management policy and risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
shareholders through the optimisation of the debt and equity balance. The
capital structure of the Group consists of debts, which include the borrowings
disclosed in note 20, cash and cash equivalents and equity attributable to the
owners of the parent, comprising issued capital, reserves and retained
earnings as disclosed in the Consolidated statement of changes in equity.
The Group's Board reviews the capital structure on an on-going basis. As part
of this review, the Board considers the cost of capital and the risks
associated with each class of capital. The Group seeks a conservative gearing
ratio (the proportion of net debt to equity). The Board is currently satisfied
with the Group's gearing ratio.
The gearing ratio at the year-end is as follows:
2024 2023
£'000 £'000
Borrowings (debt facility and loan notes) (3,461) (3,463)
Cash and cash equivalents 6,270 4,948
Net cash 2,809 1,485
Total equity 3,480 5,797
Net cash to equity ratio 81% 26%
The Group's gearing ratio has changed due to an increased cash balance
resulting from operational cash inflows and a decrease in equity due to
overall movement in loss and comprehensive expense for the period.
Financial instruments by category
2024 2023
£'000 £'000
Categories of financial assets and liabilities
Financial assets - measured at amortised cost
Trade and other receivables 5,591 10,075
Cash and cash equivalents 6,270 4,948
Financial liabilities - other financial liabilities at amortised cost
Trade and other payables (5,811) (5,926)
Borrowings (3,461) (3,463)
Lease liabilities (789) (417)
Financial liabilities - other financial liabilities at fair value
Deferred and contingent consideration payable (3,709) (2,332)
The fair values of the Group's cash and short-term deposits and those of other
financial assets equate to their carrying amounts. The Group's receivables and
cash and cash equivalents are all classified as financial assets and carried
at amortised cost. The amounts are presented net of provisions for doubtful
receivables and allowances for impairment are made where appropriate. Trade
and other payables and loan borrowings are all classified as financial
liabilities measured at amortised cost.
The contingent consideration payable in relation to The Edge is measured at
fair value, using level 3 inputs in the calculation of fair value. The
contingent consideration is made up of two parts. The larger portion of the
consideration is fair valued using a Monte Carlo simulation where the EBIT of
the first year is based on actual performance and each of the remaining two
years is an independent, normally distributed random variable. An EBIT of
£1.3m has been used for year one, £0.7m for year two and £1.2m for year
three. Values have been calculated for all three years and in total and the
average represents the fair value. As this is based on estimated EBIT the
actual amount may be different. The smaller part of the contingent
consideration relates to a performance bond that is owed to The Edge. All
contingent consideration has been discounted using a discount rate of 13.3%. A
£0.1m increase in EBIT in each of years two and three could increase the
contingent consideration payable by £0.2m, and a £0.2m decrease in EBIT in
each of years two and three could decrease the contingent consideration
payable by £0.6m.
The contingent consideration payable in relation to Raw Cut is measured at
fair value, using level 3 inputs in the calculation of fair value. The
consideration is fair valued using a Monte Carlo simulation where the EBITDA
of the remaining two years is an independent, normally distributed random
variable. An EBITDA of £0.4m has been used for year one, £0.5m for year
two. Values have been calculated for both years and in total and the average
represents the fair value. As this is based on estimated EBITDA the actual
amount may be different. All contingent consideration has been discounted
using a discount rate of 9.1%. A £0.1m decrease in EBITDA in year one and a
£0.2m decrease in EBITDA in year two could decrease the contingent
consideration payable by £0.3m, and a £0.2m increase in EBITDA in year one
and a £0.1m increase in EBITDA in year two could increase the contingent
consideration payable by £0.4m.
22) DEFERRED TAX
Deferred tax is calculated in full on temporary differences under the
liability method using a tax rate of 25% (2023: 25%) for UK differences. The
movements in deferred tax assets and liabilities during the year are shown
below.
Deferred tax asset Deferred tax liability Net position
£'000 £'000 £'000
At 1 January 2023 991 (991) -
Recognised on intangible assets - 163 163
Recognised on current period amortisation - - -
Recognised on tax losses (163) - (163)
At 31 December 2023 828 (828) -
Recognised on intangible assets (211) (211)
Recognised on current period amortisation - - -
Recognised on tax losses 211 211
At 31 December 2024 1,039 (1,039) -
Deferred tax assets estimated at £1.8m (2023: £5.1m) in respect of losses
carried forward have not been recognised due to uncertainties as to when
income will arise against which such losses will be utilised.
23) PROVISIONS
2024 2023
£'000 £'000
Provisions 171 276
Movement in provisions
£'000
At 31 December 2023 276
Additions 80
Utilised in the year (41)
Released in the year (144)
At 31 December 2024 171
Provisions comprise dilapidation provisions relating to properties. The
associated forecast cash outflows are £nil in 2025. The movement in the
provision in the year relates to the vacation of Tern's office in Glasgow and
an additional provision in relation to a new office there.
24) BUSINESS COMBINATIONS
Raw Cut Ventures Limited
In October 2024, the Company acquired the entire issued share capital of Raw
Cut Ventures Limited ("Raw Cut"). Zinc acquired Raw Cut due to its close
strategic fit, as it produces high quality factual television content, has a
significant distribution and IP catalogue, enhances Zinc's regional presence
via its production base in Wales and it has a track record of strong financial
performance.
The initial consideration was £1.0m paid in Zinc shares. Zinc acquired Raw
Cut with an agreed normalised working capital, with £1.0m of net cash paid
for in cash at completion on a pound-for-pound basis. Up to an additional
£5.5m of deferred consideration is payable contingent on the trading
performance of Raw Cut in FY25 and FY26. Deferred and contingent consideration
payments include holdback amounts due in cash and further amounts paid in
either Zinc ordinary shares and/or in non-interest-bearing loan notes (to be
redeemed by the relevant noteholder no earlier than 6 months after their
issue), in each case at Zinc's discretion.
Raw Cut's full year trading performance resulted in £4.8m of revenue and a
profit before tax of £0.3m, of which £0.6m of revenue and £0.1m of profit
before tax has been included in the Group's consolidated results.
The fair value of the assets acquired and liabilities assumed were as follows:
Fair value
£'000
Property, plant and equipment 22
Inventory 12
Trade and other receivables 48
Cash and cash equivalents 2,179
Trade and other payables (830)
Current tax liabilities (49)
Deferred tax (71)
Net assets acquired 1,311
Customer relations capitalised 229
Order book capitalised 67
Distribution rights capitalised 267
Brand capitalised 721
Deferred tax liability on intangible assets (321)
Goodwill capitalised 1,057
Consideration 3,331
Satisfied by:
Issue of shares 1,000
Cash 1,032
Deferred and contingent consideration 1,299
3,331
25) SHARE CAPITAL AND RESERVES
2024 2023
Ordinary shares with a nominal value of: 0.125p 0.125p
Authorised:
Number Unlimited Unlimited
Issued and fully paid:
Number 24,345,002 22,765,327
Nominal value (£'000) 30 28
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
The movements in share capital and reserves in the year are made up as
follows:
31 Dec 2024 31 Dec 2023
Number of Share Share Merger Share-based Number of Share Share Merger Share-based
shares capital premium reserve payment shares capital premium reserve payment
reserve reserve
Ordinary shares £'000 £'000 £'000 £'000 £'000 £'000 £'000
At start of year 22,765,327 28 9,546 1,163 547 21,806,834 27 9,546 566 457
Share placing and subscription for cash - - - - - - - - - -
Expenses of issue of shares - - - - - - - - - -
Consideration paid in shares 1,541,622 2 998 - - 654,637 1 - 597 -
Shares issued in lieu of fees 38,053 - - - - 33,783 - - - -
Equity settled share based payments - - - - 168 270,073 - - - 90
At end of year 24,345,002 30 10,544 1,163 715 22,765,327 28 9,546 1,163 547
Consideration paid in shares
On 30 October 2024, the Group issued 1,541,622 new ordinary shares in relation
to initial consideration to acquire Raw Cut Ventures Limited.
On 21 March 2025, the Group issued 342,208 new ordinary shares at a price of
£0.64 per share in relation to contingent consideration payable in relation
to the acquisition of The Edge.
Shares issued in lieu of fees
On 22 August 2024 the Group issued 38,053 new ordinary shares at a price of
£0.83 per share to a Director in lieu of payment of Director fees.
Nature and purpose of the individual reserves
Below is a description of the nature and purpose of the individual reserves:
· share capital represents the nominal value of shares issued;
· share premium includes the amounts over the nominal value in
respect of share issues; in addition, costs in respect of share issues are
debited to this account;
· the merger reserve is used where more than 90 per cent of the
shares in a subsidiary are acquired and the consideration includes the issue
of new shares by the Company, which attract merger relief under the Companies
Act 1985 and, from 1 October 2009, the Companies Act 2006;
· the share-based payment reserve arises on recognition of the
share-based payment charge in accordance with IFRS2 Share Based Payment
Transactions; and
· retained earnings include the realised gains and losses made by
the Group and the Company.
26) RELATED PARTY TRANSACTIONS
Herald Investment Trust plc and John Booth Charitable Foundation
The Company is the borrower of unsecured debt and loan notes with Herald
Investment Trust plc and John Booth Charitable Foundation requiring a bullet
repayment on 31 December 2025. The total amount outstanding at 31 December
2024 including accrued interest is £3.5m (2023: £3.5m). Interest accrued on
the debt amounted to £0.1m (2023: £0.1m).
27) POST BALANCE SHEET EVENTS
Post year end the long-term debt holders agreed to extend the term of the debt
by two years, such that the repayment of the debt is now due on 31 December
2027.
28) GUARANTEE IN RELATION TO SUBSIDIARY AUDIT EXEMPTION
On 24 April 2025, the Directors of the Company provided guarantees in respect
of its trading subsidiary companies in accordance with section 479C of the
Companies Act 2006. As a result, the following subsidiary entities of the
Company are exempt from the requirements of the Companies Act 2006 relating to
the audit of accounts under section 479A of the Companies Act 2006:
Blakeway Productions Limited 02908076
Films of Record Limited
01446899
Raw Cut Distribution Ltd
08279893
Raw Cut PI Limited
08332247
Raw Cut Productions Ltd
12718803
Raw Cut Television Limited
04569404
Raw Cut Ventures Ltd
08332523
Reef Television Limited
03500852
Tern Television Productions Limited SC109131
The Edge Picture Co Limited
02557058
Tomos TV Ltd
11140864
Zinc 6000 Bicycles Ltd
15924526
Zinc Communicate CSR Limited 06271341
Zinc Communicate Productions Limited 03136090
Zinc Television London Limited
02800925
Zinc Television Regions Limited 02888301
Cautionary note regarding forward-looking statements
This press release may contain certain forward-looking information. The words
"expect", "anticipate", believe", "estimate", "may", "will", "should",
"intend", "forecast", "plan", and similar expressions are used to identify
forward looking information.
The forward-looking statements contained in this press release are based on
management's beliefs, estimates and opinions on the date the statements are
made in light of management's experience, current conditions and expected
future development in the areas in which the Company is currently active and
other factors management believes are appropriate in the circumstances. The
Company undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless required by applicable law.
Readers are cautioned not to place undue reliance on forward-looking
information. By their nature, forward-looking statements are subject to
numerous assumptions, risks and uncertainties that contribute to the
possibility that the predicted outcome will not occur, including some of which
are beyond the Company's control. There can be no assurance that
forward-looking statements will prove to be accurate as actual results and
future events could vary or differ materially from those anticipated in such
statements.
Inside Information
The information contained within this announcement constitutes inside
information for the purposes of Article 7 of the Market Abuse Regulation (EU)
no. 596/2014 as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. On the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
1 (#_ftnref1) On a like-for-like basis, comparing continuing operations
2 (#_ftnref2) Source: PACT UK Television Production Survey 2024, by Oliver
and Ohlbaum
3 (#_ftnref3) On a like-for-like basis, comparing continuing operations
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