REG - Zoo Digital Group - Trading Update

Zoo DigitalAnnouncement

Thu 08:00

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RNS Number : 8591H  Zoo Digital Group PLC  08 May 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.

 

8 May 2025

 

ZOO DIGITAL GROUP PLC

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

 

Trading Update

 

·     Subject to audit, FY25 revenue is expected to be up 22% to $49.4*
million and adjusted EBITDA of at least $0.1 million (FY24: loss of
$13.6 million)

·     Net cash as at 31 March 2025 of $2.6 million

·     Business is proactively restructuring its costs to focus on being
profitable and cash-generative from a lower revenue base, reflecting the
challenging trading conditions

·     $6.8 million of annualised fixed cost savings made since the start
of FY25 with a further $1.7 million savings being implemented in FY26

 

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

 

Further to the announcement of 2 February 2025, the assets related to several
high value projects were not delivered during FY25Q4 and are expected to be
delivered during the first half of FY26. As a result, the Board expects
revenue for FY25 to be $49.4 million, which is up 22% on the prior year, and
for EBITDA (adjusted for share-based payments) to be at least $0.1 million
(FY24: loss of $13.6 million)*.

 

Cash at 31 March 2025 was ahead of expectations at $2.6 million* due to a
strong focus on cash management and working capital, including active
management of trade creditors. The Group's invoice discounting facilities of
$3 million and £2 million were unutilised at 31 March 2025. The Board
expects to partially draw on these facilities during FY26. Cash management
continues to be a key focus for the business.

 

The Board has continued its programme of cost reductions throughout 2025,
having implemented $6.8 million of costs savings in FY25 attributed to
people, property and legal and professional expenses. This initiative is
ongoing with the Board having already identified a further $1.7 million of
additional savings to be delivered in FY26, attributed primarily to people and
IT expenditure. The Board is committed to continuing to improve operational
efficiency in FY26 to enable the business to deliver profits and positive cash
generation in the event market conditions continue to remain challenging.

 

The cost savings are a result of a continued efficiency programme, taking
advantage of previous offshore investments to lower the fixed costs of
fulfilling a range of services while moving some previously fixed costs to
variable, as well as a detailed review of property, IT and other expenses. The
Company is adopting a range of AI technologies that, taken together with the
wider efficiency programme, are focussed on delivering a more flexible, lower
cost operation that can scale efficiently with revenue growth as the end
markets recover.

 

The media and entertainment industry continues to adapt to a changing market
environment following the disruption of the past two years, including the
Hollywood writers' and actors' strikes. The Company expects its customers to
continue to license a greater proportion of content and as a result, the Board
anticipates that FY26 revenues are likely to include several larger,
non-repeating projects. This leads to greater challenges in forecasting of
revenues and resourcing due to the uncertainty and timing of ZOO's customers
concluding arrangements with licensors and licensees.

 

The Board also notes the recent announcement from the US government relating
to potential 100% tariffs on films made outside the United States. The Board
is monitoring the tariff proposals and engagement with the industry and will
provide a further update in due course. While the Board believes that it is
too early to form a view on the impact on ZOO's operations or that of its
customers, it is fully committed to adjusting the cost base as necessary to
achieve its FY26 objectives of delivering profits and generating cash. As a
result of the current challenging market environment the Board believes that
revenues for FY26 will be below previous expectations.

 

Further to the announcement of 23 January 2025 that it is seeking a new CFO,
the Board is pleased to separately announce today the appointment of a new
CFO.

 

Stuart Green, Chief Executive Officer of ZOO Digital, said:

 

"We are fundamentally reshaping the business to right size our operations and
create a sustainable platform for the future. This proactive approach
positions ZOO to be profitable and cash generative in the current challenging
market, and as industry dynamics change, benefitting from our competitive
advantage as a technology-enabled, highly scalable business. We continue to
explore new revenue streams with our partners and are well placed to adapt and
capitalise on an evolving media and entertainment market."

 

 

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 the purposes of this announcement, the Group believes market consensus
for FY25 to be revenue of $50.7 million, EBITDA (adjusted for share-based
payments) of $1.5 million and cash of $1.4 million.

For further information:

 

 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 / Joe Quinlan                         zoo@vigoconsulting.com

 

 

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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