TIDMZOO
RNS Number : 5706W
Zoo Digital Group PLC
28 April 2016
ZOO DIGITAL GROUP PLC
("ZOO" or "the Company")
Trading Update
ZOO Digital Group plc, the provider of subtitling and digital
distribution services for the global entertainment industry, today
announces an update on trading for the financial year ended 31
March 2016.
The Company is pleased to report that revenue for the year is
expected to be approximately $11.6m (2015: $11.5m). As previously
announced, the Company suffered disruption to its business caused
by the acquisition of one of its largest customers. This customer
contributed 24% of the Company's revenues in the year to March
2015; growth from new clients in the period to March 2016 has fully
offset this shortfall.
The Company expects to report EBITDA of approximately $0.2m
(2015: EBITDA loss of $0.7m). Gross margin remained strong at 79%
(2015: 78%).
The new convertible loan note of GBP500,000 raised in December
2015 has provided additional working capital to support the
on-going development of the business which, during the year to
March 2016, has seen customer numbers swell by 29%.
The entertainment industry continues to evolve rapidly with
online retailers, such as Apple, Netflix, Amazon, Google and Hulu,
playing an increasingly significant role. According to the Digital
Entertainment Group, overall electronic sell-through (EST) spending
rose 18% in calendar 2015. Research from Adobe and The Diffusion
Group indicates that consumers are now spending 42% of their TV
viewing time watching streaming video services. ZOO continues to
build on its relationships with leading online retailers, and in
February 2016 was approved by Apple to offer iTunes aggregation
services for TV series, in further recognition of its consistent
delivery of outstanding quality content to the iTunes store.
The Company has continued to invest in its cloud computing
platforms, including ZOOcore and ZOOsubs, which are increasingly
sought in the market to enable quality TV and movie content to be
delivered in more languages to many online retailers more quickly,
reliably and at higher quality. ZOOsubs, which is being adopted as
the subtitle system of record by a growing number of ZOO's clients,
recently passed the milestone of 100 million subtitles stored for
leading content producers.
To capitalise on the growth market, ZOO has expanded its
commercial team through two key appointments. Syed Ahmed has joined
to focus on international business development, opening up
opportunities for customers in the Middle East, South Asia and Asia
Pacific. Syed previously held the position of Managing Director for
the Middle East with Deluxe. European sales will also be expanded
following the appointment of Mazin Al-Jumaili who joins as Director
of Business Development for Europe. Mazin was previously VP
Localisation Europe at Deluxe and most recently Managing Director
UK at BTI Studios.
In response to client demand, ZOO has introduced a number of new
products and services in the period:
-- The first is a subtitling service for TV advertising - an
area of growth as legislation around the world increasingly
requires broadcasters to make more programmes accessible to viewers
with disabilities.
-- Using services enabled through its cloud technology, ZOO is
now able to improve significantly the discoverability of video
materials on the internet by the preparation of contextual
information that reveals what is happening in each scene. Although
currently in its infancy, we expect this enriched metadata will
become increasingly important to online retailers.
-- To assist in the management of media assets for delivery to
the growing number of digital platforms, the Company has developed
ZOOvault to provide secure cloud storage and simplify ordering of
new languages and formats.
-- At the North American Broadcasters (NAB) show in Las Vegas in
April the Company unveiled ZOOscreen - a new digital service to
deliver screeners (viewing copies) for Academy Awards and other
film festivals. Currently screeners are distributed on DVD;
ZOOscreen provides a higher quality, more economical and secure way
to deliver content to Academy Members and other recipients. NAB
2016 has been the Company's best ever tradeshow in terms of
visitors and meetings.
The ongoing changes in the industry are the result of demand for
wider availability of entertainment content around the world,
delivered in more languages by more online retailers. This calls
for a new breed of service provider, offering more agile and
efficient services. Through its development and use of innovative
cloud technology, ZOO is uniquely placed to capitalise on the
growing market opportunity. Despite continuing flux within the
industry, ZOO is now securing traction from content owners and
online retailers, resulting in greater diversification of the
client base, reduced client concentration and a stronger sales
pipeline.
Stuart Green, Chief Executive Officer of the Company, commented:
"We are entering our 2017 year with a stronger pipeline, a broader
range of services and greater sales capability than ever before.
The board is increasingly optimistic about the Company's potential
for growth."
Ends
For further enquiries please contact:
ZOO Digital Group plc 0114 241 3700
Stuart Green - Chief Executive Officer
Helen Gilder - Group Finance Director
finnCap Ltd 020 7220 0500
Ed Frisby / Emily Watts (corporate finance)
Joanna Scott (corporate broking)
About ZOO Digital Group plc:
ZOO Digital is a provider of services allowing quality TV and
movie content to be subtitled in any language and prepared for sale
with all major online retailers. ZOO's clients are some of the
best-known brands in the world including major Hollywood studios,
global broadcasters and independent distributors.
ZOO's point of difference in the marketplace is its development
and use of innovative cloud technology. This ensures that content
is subtitled in any language and delivered to all the major online
platforms such as Netflix, Amazon, iTunes, Google and Hulu with
reduced time to market, higher quality and lower costs. ZOO's
agile, cloud-based business model enables clients to respond to
market trends, scale easily with business growth and capitalise on
new routes to market in the fast moving and evolving digital
industry.
ZOO operates from the entertainment hubs of Los Angeles and
London with a development and production centre in Sheffield. Its
full-service proposition includes digital distribution, subtitling
& captioning, metadata creation & localization, dubbing,
artwork localization, workflow and asset management.
www.zoodigital.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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