REG - Zoo Digital Group - Interim Results
10/11/2021 07:00
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RNS Number : 8636R Zoo Digital Group PLC 10 November 2021
10 November 2021
ZOO DIGITAL GROUP PLC
("ZOO" the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
Structural tailwinds and proprietary end-to-end services drive strong sales
growth
ZOO Digital Group plc (LON: ZOO), a world-leading provider of cloud-based
localisation and digital media services to the global entertainment industry,
today announces its unaudited financial results for the six months ended 30
September 2021 ("H1 FY22").
HIGHLIGHTS
Key Financials
· Revenues increased by 64% to $26.9 million (H1 FY21: $16.4 million)
driven by strong growth in the period for subtitling and media services
· Gross profit increased by 68% to $8.6 million (H1 FY21: $5.1 million)
· Adjusted EBITDA(1) up 82% to $2.4 million (H1 FY21: $1.3 million)
reflecting the strong revenue growth and operational gearing
· Operating profit of $0.4 million (H1 FY21: loss of $0.1 million)
· Cash balance of $8.2 million at period end (H1 FY21: $2.1 million)
benefitting from the $10.3 million placing in April 2021 to fund accelerated
growth
· Conversion of the 7.5% unsecured convertible loan stock into
5,273,959 new shares, removing the main borrowings of the Group and the
associated interest payments
Operational Highlights
· Extended ZOOstudio platform further and secured a new customer
deployment
· Media services grew by 142% due to a high volume of work in preparing
catalogue titles for release on streaming platforms
· Localisation grew 30% as new productions resumed in Q2
· Freelancer network grew to 9,752 (H1 FY21: 8,272, +18%)
· Established mastering team, launched new service and secured first
customer
· Launched global growth initiative with investment to establish ZOO
Turkey
· Signed lease to rent new property in Sheffield to support long-term
innovation and growth
Outlook
· Strong order book across all service lines with good visibility for
H2 and a pipeline of work from established, satisfied customers
· New mastering initiative and international expansion provide two
additional revenue streams
· The Board expects that the developments in its services will yield
greater diversity in revenue categories in the period ahead
· The Board will continue to invest in expanding capacity to support an
increase in market share in H2 and into FY23, which is expected to generate
increased profitability in future periods
(1)adjusted for share-based payments
Stuart Green, CEO of ZOO Digital, commented:
"Structural tailwinds and our end-to-end services powered by our proprietary
systems have fuelled very strong revenue growth while back catalogue work
surged as streaming globalises. More recently new production work returned and
reached pre-pandemic levels in August.
"We are building on our international capability through partnering and
investing in regions of the world where the strongest growth is anticipated.
The launch of ZOO Turkey has already strengthened our MENA operations and
discussions are underway in further territories to ensure that we are best
placed to enhance our offer and grow market share.
"This is our time. We are but one of a handful of players that can meet client
needs through our market leading approach. We are confident of strong growth
for the foreseeable future. We are currently building increased capacity to
accelerate sales and making great strides toward our medium term target of
$100 million."
For further enquiries, please contact:
ZOO Digital Group plc +44 (0) 114 241 3700
Stuart Green - Chief Executive Officer
Phillip Blundell - Chief Finance Officer
Stifel Nicolaus Europe Limited +44 (0) 20 7710 7600
Fred Walsh / Tom Marsh
Instinctif Partners +44 (0) 20 7457 2020
Matthew Smallwood / Joe Quinlan
The Company further wishes to draw attention to the posting on its website
(www.zoodigital.com (http://www.zoodigital.com) ) of a presentation to
shareholders regarding its interim results, and of an investor presentation
(www.zoodigital.com/interims2022 (http://www.zoodigital.com/interims2022) )
that will be live streamed on Wednesday 10(th) November at 5:00pm GMT.
About ZOO Digital Group plc:
ZOO Digital supports major Hollywood studios and streaming services to
globalise their content and reach audiences everywhere, by providing
world-leading, technology-enabled localisation and media services.
Founded in 2001, ZOO Digital operates from hubs in Los Angeles, London and
Dubai, with a development and production centre in Sheffield, UK. The company
is targeting $100m sales in the medium term.
The Group provides media services through its platforms that include: ZOOsubs,
ZOOdubs, ZOOstudio. Its full-service proposition delivers the end-to-end
services required to prepare both original and catalogue content for digital
distribution; these services include dubbing, subtitling & captioning,
metadata creation & localisation, artwork localisation and media
processing. Alongside this offering, ZOO also provides its customers with
management platforms and strategic solutions to support their own internal
globalisation operations.
ZOO is a go-to service partner for media businesses looking to globalise their
content across different territories, languages and distribution platforms.
Using its innovative technology-enabled approach, ZOO helps its customers to
reduce time to market, lower costs and deliver high quality products to their
global audiences. The business has frameworks in place with all major
Hollywood studios and streaming services. Its customers include Disney,
NBCUniversal, HBO and ViacomCBS.
ZOO's competitive advantage arises from three interlinking factors - the
leading role it has played in the digital transformation of its sector; the
world class proprietary platforms that it develops to enable this
transformation; and the global supply chain of thousands of freelancers,
working collaboratively in ZOO's platforms, which delivers services that scale
easily to meet demand. These factors combine to make ZOO uniquely geared to
capitalise on new market opportunities in a fast-paced and constantly evolving
industry.
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
Overview
During the first half of the Company's FY22, production companies across the
global entertainment industry resumed work on creating new TV series and
feature films that will drive growth in H2 and beyond. In August, it was
reported that new projects were back to pre-pandemic levels and that TV
production continues to surge. This, combined with the on-going migration of
catalogue content to streaming platforms and the launch of those platforms in
new territories has driven very strong sales growth in H1 of 64% over the
prior year period, a trend that we expect to continue, and excellent results
overall.
The Over-the-Top (OTT: film and television content platforms provided via
high-speed internet connections instead of cable or satellite provider-based
platforms) market was worth around $122 billion in 2019 and is forecast to
reach $1 trillion by 2027 (source: Allied Market Research). By 2021 82% of US
consumers had at least one streaming subscription, with four subscriptions
being the average (source: Deloitte). Indications are that the upsurge in
subscriptions over the past 18 months will be sustained, with 86% of
subscribers planning on maintaining or adding to their subscriptions (source:
Brightback).
Whilst almost all households in the US already have at least one OTT
subscription, it is from several other regions that we see opportunities for
rapid growth.
Of the hundreds of distinct OTT providers, an increasing number have set out
their intentions to distribute services on a global or multinational basis.
Platforms that have access to premium content with global appeal are looking
at international markets to support their accelerated growth. This, in turn,
is a driver of demand for the services provided by ZOO.
Key growth regions are: Eastern Europe from 2022 following launches from
Disney+, Sky Showtime and HBO Max; Asia Pacific is anticipated to nearly
double by 2026; India to triple over the same period; and the MENA region
anticiped to grow by 74% (source: Digital TV Research). For OTT providers,
maximising revenue opportunities will require more content to be localised
into a greater number of the languages spoken in these regions than has ever
been the case previously.
The recent success of the Korean Netflix Original series Squid Game has also
highlighted the significant trend for global distribution of non-English TV
content. Since its release it has been the most popular Netflix show in over
90 countries. Netflix has been investing in non-English programming since 2015
and has spent more than $1 billion on Korean content alone.
Once post-production has been completed for a new title, localisation and
media services must be performed before the title can go live on a streaming
platform. In the past the procurement of this range of services was frequently
divided amongst several different vendors, each typically specialising in a
subset of the services. Due to the pace and volume with which content is being
made available for OTT streaming, buyers are increasingly turning to
End-to-End (E2E) vendors, of which ZOO is one of a very few globally capable
in fulfilling all service lines. ZOO has benefited in H1 from this trend and
the Board expects this to continue throughout H2 and beyond.
The centralisation of procurement of these services by the large US buyers is
beneficial to ZOO since it enlarges the addressable market for our services,
as purchasing decisions that were previously devolved geographically are
increasingly made through the groups with which ZOO has long-established
relationships and strong customer satisfaction.
With a proposition that has been purpose designed to address the current and
emerging needs of large media organisations, ZOO is well placed to ride the
secular growth of an industry that is expanding in multiple dimensions
simultaneously - in content, in OTT service offerings and in language
requirements. The strong growth delivered in H1 is the result not only of an
expanding market, but in ZOO's ability to adapt to change and increase its
market share from traditional vendors in the sector.
Given the significant commercial opportunities ahead, the Board has committed
investment in several areas to continue to capture and expand market share .
Cashflow generated from operations, together with the proceeds of the share
placing that completed on 31 March 2021, are being put to work to drive
accelerated profitable growth that will deliver significant return.
The Company has announced a global growth initiative to support the needs of
major content creators and streaming services by extending its international
footprint through investments in the key content sourcing and distribution
locations of Turkey, Korea, Thailand, India, Japan, and Malaysia. The
availability of resources in these locations will enable ZOO to accelerate the
growth of its talent pool and thereby to align closely with the current and
future objectives of its customers.
Continuing its leadership of the digital transformation of the sector, the
Company has been expanding the resources in its R&D team, adding software
engineers, quality assurance engineers, project and product managers, and
others to provide greater capacity and accelerate the pace at which new
innovations can be delivered to customers and partners. In addition, a further
collaborative R&D project has begun recently in which AI research in
speech technologies will be developed to provide competitive advantages in the
future.
ZOOstudio, the Company's secure platform that provides a centralised system to
manage localisation and media service operations, has been the subject of
significant further enhancement during the period, enabling ZOO to embed this
strategic capability more broadly and deeply within customer operations. The
Company is currently in the process of configuring and integrating a ZOOstudio
implementation for a further multinational media organisation.
The area of greatest expansion in headcount terms has been across our various
production teams that deliver premium services to our customers. Here we have
added more project managers, coordinators, and other roles to enlarge the
Company's throughput of projects where demand is growing in all areas. This
includes established teams for subtitling, dubbing, audio description,
artwork, metadata, and a range of media services, and now also extends to the
area of content mastering following the establishing of a new division post
period.
Investments in capital equipment have been made, not only to provide the
resources necessary to fulfil the new mastering service, but also to support a
higher throughput of digital media processing across all service lines at
facilities in Los Angeles, London, Sheffield, and Dubai.
We are grateful to the holders of the Company's convertible unsecured loan
stock who agreed to convert their loans into ordinary shares in the capital of
ZOO in September, in advance of the redemption date of 31 October 2021. The
benefit of this is that the Statement of Financial Position as of 30 September
2021 is free of significant debt, simplifying the capital structure of the
Company. The Board would like to extend its thanks to the holders of the loan
notes, most of whom have provided continuous support to the Company since the
origins of the convertible instruments in 2006.
The board remains committed to building a responsible, future-focused
business. During the period, ZOO commissioned an ESG Health Check with a
leading provider and is in the process of implementing new initiatives
particularly in the areas of education, diversity and inclusion, technological
innovation and the environment. The Company is launching its ZOOgooders
programme which permits all staff to dedicate a proportion of their working
time to the support of charities and other good causes.
Operations
ZOO's competitive advantage and differentiation stems from the breadth and
depth of its E2E proposition delivered through the Company's proprietary
technology. Accordingly, the Board has continued to strengthen its E2E offer
through the launch of two recent important initiatives.
Firstly, the launch of mastering services creates an additional revenue stream
and provides an important adjacent capability that has been requested by
existing customers under the scope of E2E engagements. The procurement of
capital infrastructure to support this service and the recruitment and
training of a new team reflects a significant investment in H1 with revenues
to follow in H2 now assured through a first engagement with a leading media
organisation. This provides good visibility throughout the second half, not
only for the incremental mastering assignments but also for the wider scope of
work that is bundled with such E2E projects in the areas of localisation and
media services.
Secondly, the Company announced post period its global growth strategy and
the first of a series of investments in regional partners. To align with the
current and future objectives of ZOO's customers in fast-growing territories,
the Company is in various levels of discussions regarding investments to
expand its geographic footprint in key content sourcing and distribution
locations, namely Turkey, Korea, Thailand, India, Japan and Malaysia. The
geographic expansion will further strengthen the Company's offering with
simplified access to new territories, helping clients to overcome the
challenges of localising and fulfilling large volumes of original and
catalogue content, as well as supporting the increasing need to prepare
locally acquired TV shows and movies for streaming services around the world.
The new hubs are also expected to support the business development team by
providing wider international coverage and access to new markets.
A first investment in long-time affiliated partner and Istanbul based ARES
Media has led to establishing ZOO Turkey, extending the Company's reach across
the MENA region. With its high production values, Turkish content continues to
be strategically important to ZOO's customers which have been acquiring this
content for distribution on global streaming services. Several further
investments, each situated in a location that is of strategic significance to
the industry's growth ambitions, are in the pipeline and will be announced in
due course.
People
ZOO's strategy of creating innovative cloud software platforms with their
attendant benefits of efficiency, scalability and security is perfectly
adapted to a post-pandemic world in which remote and hybrid working have
become the new norm. ZOO's asset-light approach affords the Company the
flexibility and agility needed to maintain productivity over the long term,
delivering clear differentiation in the market for a proposition that is
increasingly valued and sought after.
We have continued to expand our servicing resources to accommodate an
ever-greater volume of business. This expansion maintains our trajectory to
reach sales of $100m in the medium term.
The strength of the Company lies in its people, their talents and commitment,
which includes our colleagues, our in-territory advocates who have been
instrumental in connecting us with resources and customers in their markets,
our expanding pool of gifted freelancers who now number close to 10,000, and
our partners, several of which we expect to become part of ZOO Digital Group
in the coming months. Delivering consistent growth at our current pace while
maintaining outstanding performance targets with all our clients is no mean
feat. We extend our heartfelt thanks to all members of the ZOO family for
their support, dedication, and resilience at this exciting time in the
development of the Company.
Outlook
The industry's gross cash amount spent producing and licensing new
entertainment content (excluding sports) soared by 16.4% in 2020 to an
all-time high of $220 billion, with 2021 spend expected to rise to more than
$250 billion (source: Purely Streamonomics). The tailwinds caused by this
explosion in new content, coupled with the accelerated migration of catalogue
content to streaming platforms and the associated new territory launches, are
providing an environment in which the Board expects to deliver sustained,
profitable growth over the long term.
The Company has a strong order book across all service lines with good
visibility for H2 and a pipeline of work from established, satisfied customers
extending into the future. The new mastering service and the customer orders
already received present an exciting opportunity to secure larger and
longer-term assignments. The Board expects that the developments in the
services offered by ZOO will yield greater diversity in revenue categories in
the period ahead.
The Board is committed to sustainable growth of the business which requires
on-going expansion of resources to support enlarged capacity. This is being
achieved through increases in headcount, expansion of the freelance talent
pool and investment in partners. These initiatives will support an increase in
market share in H2 and into FY23 and enable greater levels of profitability in
the periods ahead when the investments can be fully leveraged, propelling the
Company towards its medium-term target of $100 million in sales.
The Board is confident in delivering continuing profitable growth and in
achieving its vision to be our customers' most trusted partner to help them
deliver engaging, entertaining, and immersive content experiences to their
global audiences.
FINANCIAL REVIEW
Revenues of $26.9 million were 64% ahead of the same period last year (H1
FY21: $16.4 million). This is as a result of a 142% increase in Media
Services, driven by ZOO's support for two major OTT geographic launches in the
period. Localisation revenues, which include subtitling and dubbing services,
increased by 30% as our customers resumed some new productions post the worst
of the global pandemic.
Gross profit increased from $5.1 million to $8.6 million in the half year from
1 April 2021, reflecting the revenue growth and direct staff costs falling by
two percent. In real terms direct staff grew by 53% as we continue to build
the business to support higher volumes of orders.
Operating expenses increased to $8.3 million (H1 FY21: $5.3 million) which in
percentage terms is an increase of 57%, in line with our strategy outlined at
the time of the placing to invest in our geographic presence and in Research
and Development. We have recruited eight territory managers to source both new
talent and new customers and we have increased our R&D spend by 42% in the
half year period compared to the same period last year.
Adjusted EBITDA increased by 82% to $2.4 million compared to $1.3 million last
year as a direct result of the revenue increase offsetting the investment in
people and R&D. This is reflected in the operating profit improvement of
$0.5 million, despite increases in the depreciation charge due to higher
capital expenditure and property costs.
The statutory loss for the period was $1.7 million, which is $0.9 million more
than last year (H1 FY21: loss of $0.7 million), primarily due to the final
accounting charge related to the conversion of the 7.5% unsecured convertible
loan stock which was completed in September 2021, being a non-cash fair value
movement on the loan stock of $1.0 million.
The cash balance on 30 September 2021 was $8.2 million (H1 FY21: $2.1 million)
reflecting the net cash flow from financing of $8.2 million, primarily due to
the April fundraise. Net cash flow from operating activities was negatively
impacted by the delay in the payment of debtors resulting in an out flow of
$0.9 million. Net cash flow from investing activities was a negative $2.1
million following the investment in both R&D and capital equipment to
support the growth of the business.
The Group has short-term lease commitments on capital equipment of $1.0
million (H1 FY21: $1.4 million), a reduction of $0.4 million as no new lease
commitments were entered into during the period. The balance in short-term
borrowings relates to rent due on leasehold properties. The higher commitment
compared to last year is due to a new office lease in Sheffield which is for a
10 year period covering 19,000 square feet. This also explains the increase in
the property asset and the corresponding increase in long-term liabilities as
required by IFRS 16 of $2.0 million.
The conversion into equity of the 7.5% unsecured convertible loan stock on 22
September 2021 reduced company borrowings by $9.5 million. The transaction
involved creating 5,273,959 new shares at a price of 48p to satisfy the
repayment of the loan stock.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
for the six months ended 30 September 2021
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 Sep 2021 30 Sep 2020 31 Mar 2021
$000 $000 $000
Revenue 26,927 16,393 39,525
Cost of sales (18,357) (11,277) (25,882)
Gross Profit 8,570 5,116 13,643
Other operating income 135 110 188
Operating expenses (8,332) (5,306) (12,869)
Operating profit/(loss) 373 (80) 962
Analysed as
EBITDA before share-based payments 2,355 1,291 4,534
Share based payments (124) (57) (649)
Depreciation (1,097) (705) (1,702)
Amortisation (761) (609) (1,221)
373 (80) 962
Exchange loss on borrowings (5) (284) (359)
Costs re raise of capital (596) - -
Fair value movement on embedded derivative (971) - (3,474)
Other finance cost (317) (346) (700)
Total finance cost (1,889) (630) (4,533)
Loss before taxation (1,516) (710) (3,571)
Tax on loss (152) (15) 408
Loss and total comprehensive income for the period attributable to equity (1,668) (725) (3,163)
holders of the parent
Profit per ordinary share
- basic (2.02) cents (0.97) cents (4.24) cents
- diluted (2.02) cents (0.97) cents (4.24) cents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 30 September 2021
Unaudited as at 30 Sep 2021 Unaudited as at 30 Sep 2020 Audited as at 31 Mar 2021
$000 $000 $000
ASSETS
Non-current assets
Property, plant and equipment 6,935 4,650 4,362
Intangible assets 6,876 6,693 6,812
Deferred tax assets 486 486 486
14,297 11,829 11,660
Current assets
Trade and other receivables 12,440 7,313 8,063
Contract assets 2,194 1,867 2,178
Cash and cash equivalents 8,214 2,073 2,949
22,848 11,253 13,190
Total assets 37,145 23,082 24,850
LIABILITIES
Current liabilities
Trade and other payables (11,216) (9,311) (9,955)
Contract liabilities (558) (736) (813)
Borrowings (1,771) (1,598) (5,032)
Separable embedded derivative - - (4,452)
(13,545) (11,645) (20,252)
Non-current liabilities
Borrowings (3,093) (5,810) (1,759)
Separable embedded derivative - (978) -
Total liabilities (16,638) (18,433) (22,011)
Net assets 20,507 4,649 2,839
EQUITY
Equity attributable to equity holders of the parent
Called up share capital 1,166 1,011 1,010
Share premium reserve 51,191 41,022 41,003
Other reserves 12,320 12,320 12,320
Share option reserve 2,209 1,432 2,085
Capital redemption reserve 6,753 6,753 6,753
Convertible loan note reserve 8,914 42 42
Foreign exchange translation reserve (992) (992) (997)
Accumulated losses (60,999) (56,893) (59,331)
20,562 4,695 2,885
Interest in own shares (55) (46) (46)
Attributable to equity holders 20,507 4,649 2,839
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
for the six months ended 30 September 2021
Ordinary shares Share premium reserve Foreign exchange translation reserve Convertible loan note reserve Share option reserve Capital redemption reserve Other reserves Accumu-lated losses Interest in own shares Total
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at
1 April 2020 1,010 41,003 (992) 42 1,375 6,753 12,320 (56,168) (46) 5,297
Issue of share capital 1 19 - - - - - - - 20
Share-based payments - - - - 57 - - - - 57
Transactions with owners 1 19 - - 57 - - - - 77
Loss for the period - - - - - - - (725) - (725)
Total comprehensive income for the period - - - - - - - (725) - (725)
Balance at
30 September 2020 1,011 41,022 (992) 42 1,432 6,753 12,320 (56,893) (46) 4,649
Share options exercised - - - - 61 - - - - 61
Share-based payments - - - - 592 - - - - 592
Foreign exchange translation - - (5) - - - - - - (5)
Issue of share capital (1) (19) - - - - - - - (20)
Transactions with owners (1) (19) (5) - 653 - - - - 628
Loss for the period - - - - - - - (2,438) - (2,438)
Total comprehensive income for the period - - - - - - - (2,438) - (2,438)
Balance at
31 March 2021 1,010 41,003 (997) 42 2,085 6,753 12,320 (59,331) (46) 2,839
Share based payments - - - - 124 - - - - 124
Foreign exchange translation - - 5 - - - - - (9) (4)
Issue of share capital 156 10,188 - 8,872 - - - - - 19,216
Transactions with owners 156 10,188 5 8,872 124 - - - (9) 19,336
Loss for the period - - - - - - - (1,668) - (1,668)
Total comprehensive income for the period - - - - - - - (1,668) - (1,668)
Balance at
30 September 2021 1,166 51,191 (992) 8,914 2,209 6,753 12,320 (60,999) (55) 20,507
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
for the six months ended 30 September 2021
30 Sep 2021 30 Sep 2020 31 Mar 2021
Unaudited Unaudited Audited
6 months to
30 Sep 2021 6 months to Year ended
$000 30 Sep 2020 31 Mar 2021
$000 $000
Cash flows from operating activities
Operating profit/(loss) for the period 373 (80) 962
Depreciation 1,097 705 1,715
Amortisation 761 609 1,221
Share based payments 124 57 649
Changes in working capital:
(Increases)/decreases in trade and other receivables (4,377) 143 (918)
Increases/(decreases) in trade and other payables 1,261 1,998 2,719
Cash flow from operations (761) 3,432 6,348
Tax (paid)/received (152) (15) 408
Net cash flow from operating activities (913) 3,417 6,756
Investing Activities
Purchase of intangible assets (17) (41) (67)
Capitalised development costs (808) (569) (1,274)
Purchase of property, plant and equipment (1,285) (1,588) (2,290)
Net cash flow from investing activities (2,110) (2,198) (3,631)
Cash flows from financing activities
Repayment of borrowings (283) (540) (982)
Proceeds from borrowings - 1,042 1,043
Proceeds from fund raise 10,107 - -
Repayment of principal under lease liabilities (503) (543) (1,102)
Finance cost (593) (343) (414)
Share options exercised - - 61
Share issue costs (596) 19 -
Issue of Share Capital 156 1 -
Net cash flow from financing 8,288 (364) (1,394)
Net Increase in cash and cash equivalents 5,265 855 1,731
Cash and cash equivalents at the beginning of the period 2,949 1,218 1,218
Cash and cash equivalents at the end of the period 8,214 2,073 2,949
NOTES
General information
ZOO Digital Group plc ('the Company') and its subsidiaries (together 'the
Group') provide productivity tools and services for digital content authoring,
video post-production and localisation for entertainment and packaging markets
and continue with on-going research and development in those areas. The Group
has operations in both the UK and US.
The Company is a public limited company which is listed on the Alternative
Investment Market and is incorporated and domiciled in the UK. The address of
the registered office is 7(th) Floor, City Gate, 8 St Mary's Gate, Sheffield.
The registered number of the Company is 3858881.
This condensed consolidated financial information is presented in US dollars,
the currency of the primary economic environment in which the Company
operates.
The interim accounts were approved by the board of directors on 9 November
2021.
This consolidated interim financial information has not been audited.
Basis of preparation
The consolidated financial statements of ZOO Digital Group plc and its
subsidiary undertakings for the period ended 31 March 2022 will be prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006.
This Interim Report has been prepared in accordance with UK AIM listing rules
which require it to be presented and prepared in a form consistent with that
which will be adopted in the annual accounts having regard to the accounting
standards applicable to such accounts. It has not been prepared in accordance
with IAS 34 "Interim Financial Reporting".
The policies applied are consistent with those set out in the annual report
for the year ended 31 March 2021, and have been consistently applied, unless
stated otherwise.
This condensed consolidated financial information is for the six months ended
30 September 2021. It has been prepared with regard to the requirements of
IFRS. It does not constitute statutory accounts as defined in S343 of the
Companies Act 2006. It does not include all of the information required for
full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 March
2021 which contained an unqualified audit report and have been filed with the
Registrar of Companies. They did not contain statements under s498 of the
Companies Act 2006.
The Group has applied the same accounting policies and methods of computation
in its interim consolidated financial statements as in its 2021 annual
financial statements, except for those that relate to new standards and
interpretations effective for the first time for periods beginning on (or
after) 1 April 2021 and will be adopted in the 2022 financial statements.
There are no standards impacting the Group that will be required to be adopted
in the annual financial statements for the year ended 31 March 2022.
Basis of Consolidation
The consolidated financial statements of ZOO Digital Group plc include the
results of the Company and its subsidiaries. Subsidiary accounting policies
are amended where necessary to ensure consistency within the Group and intra
group transactions are eliminated on consolidation.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting regularly reviewed by the group's chief operating decision maker to
make decisions about resource allocation to the segments and to assess their
performance.
Localisation Media services Software Licensing Total
FY22 H1 FY21 H1 FY22 H1 FY21 H1 FY22 H1 FY21 H1 FY22 H1 FY21 H1
$000 $000 $000 $000 $000 $000 $000 $000
Revenue 12,906 9,940 13,122 5,416 899 1,037 26,927 16,393
Segment contribution 2,658 1,549 6,835 3,620 830 895 10,323 6,064
Unallocated cost of sales (1753) (948)
Gross profit 8,570 5,116
Gross profit 16% 52% 67% 92% 86% 32% 31%
%
21%
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in US Dollars which is the Company's functional and
presentation currency.
Transactions and balances
Transactions in foreign currencies are recorded at the prevailing rate of
exchange in the month of the transaction. Foreign exchange gains or losses
resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at the
year-end exchange rates are recognised in the income statement.
Group companies
The results and financial positions of all Group entities that use a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
· assets and liabilities for each entity are translated at the closing
rate at the period end date;
· income and expenses for each Statement of Comprehensive Income item are
translated at the prevailing monthly exchange rate for the month in which the
income or expense arose and all resulting exchange rate differences are
recognised in other comprehensive income with the foreign exchange translation
reserve.
Earnings per share
Earnings per share is calculated based upon the profit or loss on ordinary
activities after tax for each period divided by the weighted average number of
shares in issue during the period.
Weighted average number of shares for basic & diluted profit per share 30 Sep 2021 30 Sep 2020 31 Mar 2021
No. of shares No. of shares No. of shares
Basic 82,429,164 74,547,389 74,597,495
Diluted 90,787,293 81,244,707 82,955,624
Where the Group has recorded a loss, diluted earnings per share is equal to
basic earnings per share.
Further Copies
Copies of the Interim Report for the six months ended 30 September 2021 will
be available, free of charge, for a period of one month from the registered
office of the Company at 7(th) Floor, City Gate, 8 St Mary's Gate, Sheffield,
S1 4LW or from the Group's website: www.zoodigital.com
(http://www.zoodigital.com) .
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