REG - Zoo Digital Group - Trading Update

Zoo DigitalAnnouncement

20/02/2025 07:15

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RNS Number : 7764X  Zoo Digital Group PLC  20 February 2025

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as retained as part of UK law by virtue of the European
Union (Withdrawal) Act 2018 as amended. Upon the publication of this
Announcement, this inside information is now considered to be in the public
domain.

 

20 February 2025

ZOO DIGITAL GROUP PLC

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

Trading Update

ZOO Digital Group plc (AIM: ZOO), the localisation and digital media services
partner to the global entertainment industry, today provides an update on
trading and outlook for the financial year ending 31 March 2025 ("FY25").

The Board currently expects full year FY25 revenues will be at least $50.5
million, which is up 24% on the prior year. The full year revenues will result
in a return to EBITDA profit of at least $1.0 million, compared to a loss of
$13.6 million last year. As a result, FY25 revenues and EBITDA(1) are expected
to be below market expectations(2).

The Company has implemented targeted cost saving measures, reducing its fixed
costs by 20% during the year and also expects blended gross margins to improve
to 36%. The ongoing restructuring of the cost base to reduce the unit cost of
production provides a strong platform to return to cash breakeven.  The
Company has also been closely managing its cash position and it expects the
balance at the end of FY25 will exceed c.$1 million, and has invoice
discounting facilities of $3m and £2m, which are expected to be largely
unutilised.

Whilst the Company's order book has improved in recent months through the
addition of several high value projects, these are not included in the
Company's current expectations for FY25. The timing of revenue recognition for
these projects is uncertain as commencement for much of this work is dependent
on the supply of original assets from licensors. In addition, some projects in
the FY25 pipeline relate to titles that customers have either delayed or
cancelled.

The Company has secured several new customer engagements which are expected to
begin to deliver meaningful incremental revenues in FY26. This includes being
named a Preferred Fulfilment Vendor (PFV) for Amazon Prime Video, positioning
ZOO among a select group of vendors that production companies may use to
digitally package and distribute content on Amazon Prime Video.

The Company is seeing a marked increase in customer discussions around new
projects to a level greater than at any time over the past two years.
Currently, an enlarged proportion of customer assignments relate to them both
licensing in third party content and licensing out catalogues, rather than the
processing of new original programming. The Board envisages that this will be
an ongoing trend, with the additional volumes of original content starting to
recover later in FY26.

Based on current visibility, ZOO expects that dubbing revenues for FY26 will
be lower than in FY25. However, with a lower cost base and higher margin
revenue mix the overall profitability of the business is expected to improve
significantly year on year.

The Company will provide a further update on trading in a pre-close statement
in April.

The persons responsible for arranging for the release of this announcement on
behalf of ZOO are Stuart Green, Chief Executive Officer and Phillip Blundell,
Chief Financial Officer of ZOO.

 

 For further enquiries, please contact:

 ZOO Digital Group plc                                          +44 (0) 114 241 3700
 Stuart Green - Chief Executive Officer
 Phillip Blundell - Chief Financial Officer

 Canaccord Genuity (Nominated Adviser and Broker)               +44 (0) 20 7523 8000
 Simon Bridges / Harry Gooden / Andrew Potts / George Grainger

 Vigo Consulting (Financial communications)                     +44 (0)20 7390 0230
 Tim McCall / Rozi Morris                                       zoo@vigoconsulting.com

 

(1) Adjusted for share-based payments.

(2) For the purpose of this announcement, the Group believes market consensus
for FY25 to be revenue of $55m, and adjusted EBITDA of $2.75m.

About ZOO Digital Group plc:

ZOO Digital partners with major Hollywood studios and streaming services to
tell their stories to audiences around the world.

The Group's localisation and digital media services allow customers to
globalise content across different territories, languages and distribution
platforms, extending its reach and profitability.

Deploying proprietary technology platforms and 12,000+ freelancers, ZOO offers
end-to-end dubbing, subtitling and captioning, metadata creation and
localisation, mastering, artwork creation and localisation, and media
processing.

ZOO has frameworks in place with all major Hollywood studios and streaming
services, helping them to capitalise on new opportunities in a fast-paced
industry. Customers include Disney, NBCUniversal, Netflix and Paramount
Global.

Founded in 2001, the Group has a global presence with dedicated hubs in Los
Angeles, London, Dubai, Turkey, South Korea, India, Denmark, Spain, Italy and
Germany as well as a development and production centre in Sheffield, UK.

www.zoodigital.com (http://www.zoodigital.com/)

 

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