TIDMZOO
RNS Number : 7414E
Zoo Digital Group PLC
10 November 2020
10 November 2020
ZOO DIGITAL GROUP PLC
("ZOO" the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2020
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 2020 ("H1 FY21").
HIGHLIGHTS
Key Financials
-- Revenues increased by 15% to $16.4 million (H1 FY20: $14.2
million) driven by strong growth in the period for dubbing and
digital packaging
-- Gross profit reduced to $5.1 million (H1 FY20: $5.8 million)
explained by an increase in direct staff required to deliver growth
in H2
-- Adjusted EBITDA (1) of $1.3 million (H1 FY20: $1.8 million),
reflecting the reduced gross profit
-- Operating loss of $0.1 million (H1 FY20: profit of $0.4 million)
-- Cash balance of $2.1 million at period end (H1 FY20: $0.6 million)
Operational Highlights
-- Subtitling services delivered to all major Hollywood studios
-- Significant new client accounts added with total number
invoiced in H1 increasing 30% to 122 (H1 FY20: 94)
-- Cloud dubbing revenue grew by 480% year-on-year
-- Scope of ZOOstudio platform extended, leading to broader and
deeper deployment in a major OTT provider
-- Digital packaging grew 33% with significant further growth expected in Q3
-- Client retention rate increased to 98% (89% in H1 FY20)
Outlook
-- ZOO's technology is becoming increasingly embedded into the
operations of major studios and streaming services
-- Our market-leading end-to-end solution continues to be a
major beneficiary of the shift in industry prioritisation
-- Scope of services delivered to major clients is expanding
-- COVID-19 has accelerated an enduring industry shift to software-enabled services
-- Trading in the first few weeks of the third quarter has been
strong, with revenue growth expected to be over 20%
half-on-half
-- Confident in achieving increased market consensus for the full year
(1) adjusted for share-based payments.
Stuart Green, CEO of ZOO Digital, commented: "The first half of
the year may well prove to be the most significant period in the
Group's history. The COVID-19 pandemic hastened the pace of
adoption of our technology-based, media service offering and
introduced us to new customers who have trialled and engaged ZOO's
proposition and been impressed with the results. While original
title production across the industry has been placed on hold, we
have seen customers shift to back catalogue materials and the
associated high levels of demand for digital packaging services,
highlighting the benefits of our end-to-end vendor model.
"There remain significant volumes of back catalogue work, giving
us confidence in our full year performance and we are very well
placed to benefit greatly when content creation resumes. As a
result, we have invested through this half year in order to take
full advantage once conditions normalise. With a strong pipeline
and continued momentum, the Board remains confident in its ability
to achieve the increased market consensus for the full year."
For further enquiries please contact:
+44 (0) 114 241
ZOO Digital Group plc 3700
Stuart Green - Chief Executive Officer
Phillip Blundell - Chief Finance Officer
Stifel Nicolaus Europe Limited +44 (0) 20 7710
Fred Walsh / Luisa Orsini Baroni 7600
Alma PR
Josh Royston / Helena Bogle / Joe Pederzolli +44 (0) 7780 901979
About ZOO Digital Group plc:
ZOO Digital is a provider of services allowing TV and movie
content to be subtitled and dubbed in any language and prepared for
sale with all major online platforms. 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 localised in any language and delivered to all the major online
platforms such as 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 dubbing, subtitling &
captioning, metadata creation & localisation, digital
packaging, artwork localisation, workflow and asset management.
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
Overview
The first half of FY21 was a period of rapid transition to our
cloud-based platforms and off-premise voice recording, accelerated
by the requirement for remote working. Whilst traditional studios
were significantly impacted following the outbreak of COVID-19 as
lockdowns were implemented and new productions were suspended, ZOO
experienced a considerable increase in workflow, particularly in
dubbing, due to our cloud-based offering and our ability to
undertake projects remotely. This influx of work has greatly
benefited the Group, as we were able to demonstrate the capability
of our technology and secure new clients, whilst also strengthening
our relationships with existing customers.
Revenue grew by 15% to $16.4 million (H1 FY20: $14.2 million).
In order to benefit from the structural changes within our market,
we have chosen to invest in headcount now to facilitate future
growth, resulting in slightly reduced gross profit of $5.1 million
(H1 FY20: $5.8 million) and adjusted EBITDA of $1.3 million (FY20:
$1.8 million). Operating expenses were down slightly at $5.3
million (FY20: $5.5 million) due to travel restrictions, and at the
period end we had a cash balance of $2.1 million compared to $0.6
million in the prior year period.
The accelerating shift to cloud-based solutions during H1 FY21
signalled that the significant investment across our platforms and
technology in prior periods is paying off. As a result of the
original content we received at the beginning of H1 when we were
asked to dub a significant number of urgent titles that traditional
vendors were unable to process due to lockdowns, our dubbing sales
increased 480% year-on-year. The majority of dubbing services
commissioned in the industry are in relation to new original
titles, the creation of which is currently on hold. Consequently,
global demand for dubbing will be suppressed until it is safe to
resume new productions.
COVID-19 caused a negative effect on subtitling which was down
34%, again due to the temporary curtailment of production.
While new productions are on hold, we have seen a shift in focus
by customers to prepare back catalogue titles for digital
distribution which typically has a reduced requirement for
localisation and an increased requirement for digital packaging. As
a result, digital packaging was a major growth area during the
latter part of the period, and for the six months overall was up
33% year-on-year.
In a period when most traditional media localisation vendors
have been in decline, we are encouraged by the record-breaking
orders we have already received for digital packaging in the third
quarter both in size and quantity, which is a testament to our
end-to-end strategy and gives us confidence in our full year
performance and continued momentum into the new financial year.
Our long-term view is that localisation demand will increase
over time, alongside the growth in global consumer video markets.
According to Slator, in 2019 media localisation (excluding digital
packaging) was a $2.4 billion market, of which 70% was dubbing and
30% subtitling, and prior to COVID-19, media localisation was the
second fastest growing localisation vertical in percentage and USD
terms.
The acceleration of industry changes due to the pandemic has
reinforced ZOO's position in the market and strength of its
offering. The launch of direct-to-consumer Over-The-Top (OTT)
services from some of the world's major media companies such as
Disney, Apple, Warner Media, NBCUniversal and ViacomCBS is
particularly favourable to ZOO, demonstrating a requirement for the
specific services we offer and for engagements where an end-to-end
proposition is both attractive and cost effective. The initial
consumer response to these platforms has been positive, highlighted
by their on-going expansion into different territories. As demand
for OTT video increases (as has been the case during lockdown) so
too will the opportunity for ZOO.
These robust results are not only a reflection of our business
model but also testament to our colleagues who have responded
brilliantly to the challenges of their changing working
environment, particularly the increased workload, and have
continued servicing our customers with the utmost professionalism.
I would like to thank them for their continued hard work and
dedication.
Operations
ZOO's mission is to provide services for fast and cost-effective
localisation and digital distribution of media content through the
power of our world-class cloud technology. We continually strive to
enhance our offering to service the requirements of our customers
and we are pleased with the progress made during the period. Our
end-to-end vendor model combined with our unique cloud-based
technology and service proposition enabled us to adapt seamlessly
to the needs of our customers and we delivered clear progress
against our strategy during the period, invoicing 30% more client
accounts compared with the prior year period.
ZOOsubs: Our subtitling production and management platform,
ZOOsubs, has served all major Hollywood studios in H1. We have
secured new engagements and entered into enhanced relationships
with existing customers which we expect will deliver growth in the
periods ahead. The impacts of COVID-19 leading to the hiatus of new
title production have led to a 34% reduction year-on-year in
subtitling in the period. Although we are now working on a much
greater volume and proportion of back catalogue products where
subtitles are equally important, such titles have typically already
been localised into at least the major languages resulting in lower
average billing for subtitling services per project. We expect to
see an uplift in the second half following the signing of new
clients and into FY22 with the resumption of new productions.
ZOOdubs: Services delivered through our cloud-based platform for
entertainment dubbing, supporting voiceover, lip-sync and audio
description, grew 480% year-on-year in the period. The system
allows the end-to-end process of dubbing to be undertaken without
necessitating voice talent and directors to travel or to be
co-located. As a result, our dubbing services were unaffected by
lockdown and social distancing measures at a time when traditional
suppliers were required to suspend operations. During the period
immediately following the UK lockdown we were engaged by multiple
customers, some existing and some new, to assist them in completing
projects that were already in progress. Many projects were
reassigned to us from other vendors. This provided us with an
opportunity to demonstrate our capability and the quality of our
dubbing services, particularly with a number of significant buyers
that engaged with us for the first time. We believe that we will
benefit over the long term as these customers turn to us to provide
services when new productions resume.
ZOOstudio: Our ZOOstudio platform provides the capability to
manage requirements for production and delivery of assets for OTT
distribution. Last year ZOOstudio was adopted by a major media
company to manage its localisation operations for OTT production,
and during H1 the system was deployed more widely across multiple
operating groups of this customer. The platform is a key component
of our end-to-end strategy for media localisation and digital
packaging and integrates ZOO more closely with the operating groups
of our customers, delivering a frictionless exchange of orders and
fulfilment and strengthening our role as a de facto primary vendor
across multiple service lines.
Digital packaging: We have seen an increased requirement for our
digital packaging offering during the period due to customers
shifting focus to back catalogue titles, resulting in year-on-year
revenue growth of 33%. This is because when compared to new
original productions there is typically a greater proportion of
such work required to adapt and repurpose entertainment content
developed for one platform (such as broadcast TV) to streaming
video on demand. Digital Packaging embraces a large number of
separate service lines which require broad levels of expertise,
equipment and systems. There is a limited number of vendors with
this capability and fewer still who can offer an end-to-end service
including multilingual media localisation. We expect to see
continued momentum in this segment for the remainder of the year
and already have a strong order book for Q3, significantly greater
than at the same point in the prior year. To cope with the
increasing demand, we have expanded our digital packaging
department through the recruitment of new staff in the UK and US
and have upgraded our IT infrastructure to support a significantly
greater throughput of projects.
The Group has further refined its growth strategy and continues
to make significant progress against five pillars: innovation,
scalability, collaboration, building long-term client partnerships
and talent.
Innovation: creating value-adding software technology is at the
heart of what we do. By making localisation and distribution
services more efficient, scalable and collaborative, we have
positioned ourselves favourably against our peers.
Investment during the year included broadening our ZOOstudio
capability through the inclusion of additional functionalities.
ZOOstudio is our overarching localisation management platform that
offers a single, centralised system for scenario planning,
ordering, tracking and managing all of the components required to
create and deploy localised content packages. We have added
functionality to support the particularly demanding requirements of
working with back-catalogue titles, enabling pre-existing materials
(such as subtitles previously created) to be evaluated and tracked,
thereby providing visibility and simplifying substantially the
management of such projects by our customers. We have also enhanced
the financial analysis capabilities of the platform to enable
accurate tracking of costs and scenario modelling.
Our dubbing platform, ZOOdubs, continues to be a major focus of
our R&D efforts where we continue to broaden its capabilities
to support additional use cases. During the period we provided the
capability to support collaborative recording sessions featuring
multiple voice actors, whether co-located or situated in different
places. We also implemented enhancements to support the particular
requirements of dubbing for videogames.
We have continued to invest in the research and development of
advanced capabilities that we expect will provide ZOO with a
significant competitive advantage in the future, primarily through
multiple applications of machine learning technologies. Here we
collaborate with academic partners and centres of excellence,
particularly in the fields of speech and language. We have been
awarded further funding from InnovateUK to support a project that
we expect will provide us with an industry-leading capability
related to preparing children's voices for dubbing.
Scalability: Our freelance network of qualified and experienced
specialists in media localisation is integral to the successful
running of our business. We continue to expand our network of
freelance screen translators, voice actors, script adapters,
dubbing directors and audio mixing engineers, and our current
active pool of freelancers has increased to 8,272 individuals (from
6,556 at the same point in the prior year) across more than 80
languages.
Collaboration: in order to scale and extend our geographical
reach without incurring significant costs, particularly in emerging
markets, ZOO collaborates with local qualified partners to extend
our presence in key territories.
Our ZOO-Enabled Dubbing Studio (ZEDS) programme, which launched
in 2018, has continued to develop, and we now have relationships
with highly reputable independent dubbing studios across all of the
key languages currently required by our customers. Experienced,
trusted and carefully selected, ZEDS are home to some of the most
creative talent content owners want. ZOO is training each one to
use ZOOdubs to record and manage the dubbing process.
Build long-term client partnerships: we continually strive to be
selected as the preferred vendor of localisation and digital
packaging services for all of the leading content producers and
global OTT service providers, with the aim of generating recurring
revenue. Our relationship with the major OTT platform for which we
became a preferred vendor last year has led to a significant
increase in projects, whilst our preferred fulfilment partner
(NPFP) status with Netflix has allowed us to secure new contracts
for subtitling and digital packaging of licenced content, as well
as strengthening relationships with existing customers. We expect
that our engagements with new customers of dubbing services during
the period following lockdown will lead to new revenue streams when
content production in the industry resumes. Our client retention
KPI for the past 12 months was 98% (H1 FY20: 89%).
It is expected that recently and soon-to-be launched streaming
platforms from major media companies will extend their services
from an initial domestic US focus to international. This will
require localisation and digital packaging services for which
preferred vendors will be appointed. We believe that our end-to-end
offering and track record of delivering such services to other
leading OTT platforms will put us in good stead to secure further
preferred relationships in the period ahead.
Talent: the period marks an important development of our
strategic plan as we look to enhance the Company's position as a
recognised and reputable provider of premium dubbing services
across multiple languages. This includes the engagement of
established industry professionals to key functions, which is
exemplified by the recent appointment of Emmy(R) Award-winning
re-recording mixer Dave Concors as Head of Sound. With more than 30
years' experience working on both feature films and episodic
content, Dave will use his wealth of industry knowledge to develop
dubbing services at ZOO.
In addition, we have established a new talent management
function internally with a remit to identify experienced candidates
to become advocates for ZOO across key territories, using their
extensive networks of contacts to bring exceptional talent to our
ecosystem.
During the period we expanded our London office to provide
further capacity and enable us to service European clients more
efficiently.
A number of our major competitors, having been unable to operate
during lockdown, have announced their own 'remote dubbing'
capabilities. We believe that this change in the stance of our
competitors endorses the strategy we have adopted and is helping
customers to recognise that cloud dubbing represents the future of
the industry. We believe that our technology-first approach, first
mover advantage and ongoing investment will enable us to grow
market share and become a market leader.
People
We continued to invest in people during the period, with
headcount reaching 265 employees at the end of September compared
with 206 in the same period in the prior year. New hires have been
across the business, particularly in our production team, and are
both a reflection of the increased work flow we are seeing and the
need for additional resources to manage the future demand. We have
been able to attract proven, quality individuals as our competitors
have continued to struggle in this environment, with most large
vendors reducing headcount in the period.
Brexit
The Board has considered the consequence that Brexit may have on
the business and does not anticipate any significant impact on its
operations as a result of the UK leaving the European Union.
Outlook
Trading in the first few weeks of the third quarter has been
strong, with revenue growth expected to be over 20% half-on-half,
positioning us well to meet full year expectations.
The demand for our digital packaging solutions continues to be
strong, with orders for delivery in Q3 significantly ahead of any
other quarter in our history. With our market-leading end-to-end
solution we continue to be a major beneficiary of the shift in
industry prioritisation.
The Group continues to assess international expansion
opportunities with the aim of providing greater capacity in high
growth regions.
As we look ahead, we are confident that our strategy, along with
our technology and people, will help us achieve our growth
ambitions. Our solid pipeline of new business, including orders on
hand at the beginning of Q3 - substantially greater than at the
same point in the prior year - provides us with reassurance that
there is significant demand for our offering. With a strong
pipeline and continued momentum, the Board remains confident in its
ability to achieve the increased market consensus for the full
year.
FINANCIAL REVIEW
Revenues of $16.4 million were 15% ahead of the same period last
year (H1 FY20: $14.2 million). This is explained by the increase in
dubbing services and continued strength in Digital Packaging. Off a
low base, dubbing sales increased 6-fold as a number of studios
commissioned us to complete projects using our cloud-based dubbing
platform. Digital Packaging sales were up 33% as customers
continued to value our expertise in preparing back catalogue assets
for release on video streaming platforms.
Gross profit decreased from $5.8 million to $5.1 million this
year, due to significant investment in our direct staff over the
past 12 months to support the anticipated increase in orders from
our customers. This investment has exceeded $1 million and will
translate into increased profits over the next six months.
Operating expenses have decreased to $5.3 million (H1 FY20: $5.5
million) which is due to a reduction in travel and marketing
expenses directly attributable to the COVID-19 lockdown. Our
investment in R&D has accelerated in the period as we have
accommodated increased customer requests and built out our market
leading platforms, resulting in a 42% increase on the same period
last year at $0.6 million.
EBITDA before share-based payments has fallen to $1.3 million
compared to $1.8 million last year as a consequence of the
reduction in gross profit being only partly offset by the reduction
in operating expenses. This also explains the operating loss of
$0.1 million for the period, down from a profit of $0.4 million in
FY20.
The loss for the period of $0.7 million (H1 FY20: profit of $0.4
million), is partly due to the operating loss and partly due to the
adverse exchange rate between the US Dollar and Sterling that has
resulted in an increase in the value of the Company's unsecured
convertible loan notes of $0.3 million. In FY20 the exchange rate
was favourable and showed a reduction in their value of $0.3
million. This negative movement of $0.6 million is a non-cash
item.
The cash balance at 30 September was $2.1 million (H1 FY20: $0.6
million) an increase of $0.9 million in the six-month period. The
cash inflow is explained by an operating surplus of $1.3 million
and a favourable working capital movement of $2.1 million partially
offset by investment in R&D of $0.6m, a net investment in
equipment of $1.6 million and finance costs, including repayment of
borrowings, of $0.3 million.
The Group has borrowing commitments of $1.4 million (H1 FY20
$0.9 million). The increase of $0.5 million has been used to
purchase additional storage equipment to support the greatly
increased volume of digital assets we are processing on behalf of
clients. The only other borrowing that the Group has is the
unsecured convertible loan notes of GBP2.6 million ($3.5 million)
which mature in October 2021 with a conversion price of 48p. The
Group has sufficient cash and unused credit facilities to meet its
ongoing commitments.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
for the six months ended 30 September 2020
6 months 6 months
to to Year ended
30 Sep 2020 30 Sep 2019 31 Mar 2020
$000 $000 $000
======================================= ============ ============ ============
Revenue 16,393 14,242 29,793
Cost of sales (11,277) (8,452) (19,705)
--------------------------------------- ------------ ------------ ------------
Gross Profit 5,116 5,790 10,088
Other operating income 110 115 252
Operating expenses (5,306) (5,461) (10,896)
--------------------------------------- ------------ ------------ ------------
Operating (loss)/profit (80) 444 (556)
--------------------------------------- ------------ ------------ ------------
Analysed as
EBITDA before share-based payments 1,291 1,810 2,138
Share based payments (57) (142) (257)
Depreciation (705) (755) (1,369)
Amortisation and impairment (609) (469) (1,068)
--------------------------------------- ------------ ------------ ------------
(80) 444 (556)
--------------------------------------- ------------ ------------ ------------
Exchange (loss)/gain on borrowings (284) 297 197
Fair value movement on embedded
derivative - - 986
Finance cost (346) (367) (674)
--------------------------------------- ------------ ------------ ------------
Total finance cost (630) (70) 509
--------------------------------------- ------------ ------------ ------------
(Loss)/profit before taxation (710) 374 (47)
Tax on(loss)/profit (15) (13) 363
--------------------------------------- ------------ ------------ ------------
(Loss)/profit and total comprehensive
income for the period attributable
to equity holders of the parent (725) 361 316
--------------------------------------- ------------ ------------ ------------
Profit per ordinary share
--------------------------------------- ------------ ------------ ------------
(0.97)
- basic cents 0.48 cents 0.42 cents
--------------------------------------- ------------ ------------ ------------
(0.97)
- diluted cents 0.45 cents 0.39 cents
--------------------------------------- ------------ ------------ ------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 30 September 2020
As at As at As at
30 Sep
30 Sep 2020 2019 31 Mar 2020
$000 $000 $000
----------------------------------------------------------------- --------------------- --------- ------------------------
ASSETS
Non-current assets
Property, plant and equipment 4,650 4,463 3,633
Intangible assets 6,693 6,585 6,692
Deferred income tax assets 486 486 486
----------------------------------------------------------------- --------------------- --------- ------------------------
11,829 11,534 10,811
----------------------------------------------------------------- --------------------- --------- ------------------------
Current assets
Trade and other receivables 9,180 8,227 9,323
Cash and cash equivalents 2,073 607 1,218
----------------------------------------------------------------- --------------------- --------- ------------------------
11,253 8,834 10,541
----------------------------------------------------------------- --------------------- --------- ------------------------
Total assets 23,082 20,368 21,352
----------------------------------------------------------------- --------------------- --------- ------------------------
LIABILITIES
Current liabilities
Trade and other payables (10,047) (5,729) (8,049)
Borrowings (1,598) (1,364) (4,391)
Separable embedded derivative - - (978)
----------------------------------------------------------------- --------------------- --------- ------------------------
(11,645) (7,093) (13,418)
----------------------------------------------------------------- --------------------- --------- ------------------------
Non-current liabilities
Borrowings (5,810) (6,107) (2,637)
Separable embedded derivative (978) (1,965) -
----------------------------------------------------------------- --------------------- --------- ------------------------
(6,788) (8,072) (2,637)
----------------------------------------------------------------- --------------------- --------- ------------------------
Total liabilities (18,433) (15,165) (16,055)
----------------------------------------------------------------- --------------------- --------- ------------------------
Net assets 4,649 5,203 5,297
----------------------------------------------------------------- --------------------- --------- ------------------------
EQUITY
Equity attributable to equity holders
of the parent
Called up share capital 1,011 1,011 1,010
Share premium reserve 41,022 41,018 41,003
Other reserves 12,320 12,320 12,320
Share option reserve 1,432 1,227 1,375
Capital redemption reserve 6,753 6,753 6,753
Convertible loan note reserve 42 42 42
Foreign exchange translation reserve (992) (992) (992)
Accumulated losses (56,893) (56,123) (56,168)
----------------------------------------------------------------- --------------------- --------- ------------------------
4,695 5,256 5,343
----------------------------------------------------------------- --------------------- --------- ------------------------
Interest in own shares (46) (53) (46)
----------------------------------------------------------------- ---------------------
Attributable to equity holders 4,649 5,203 5,297
----------------------------------------------------------------- --------------------- --------- ------------------------
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
(UNAUDITED)
for the six months ended 30 September
2020
Foreign
Share exchange Convertible Share Capital Interest
Ordinary premium translation loan note option redemption Other Accumu-lated in own
shares reserve reserve reserve reserve reserve reserves losses shares Total
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
---------------- --------- -------- ------------- ------------ -------- ----------- --------- ------------- --------- ------
Balance at
1 April 2019 1,010 41,003 (992) 42 1,085 6,753 12,320 (56,484) (53) 4,684
Issue of
share capital 1 15 16
Share-based
payments 142 142
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Transactions
with owners 1 15 - - 142 - - - - 158
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Profit for
the period 361 361
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Total
comprehensive
income for
the period - - - - - - - 361 - 361
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Balance at
30 September
2019 1,011 41,018 (992) 42 1,227 6,753 12,320 (56,123) (53) 5,203
Share-based
payments 148 148
Foreign
exchange
translation 7 7
Issue of
share capital (1) (15) (16)
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Transactions
with owners (1) (15) - - 148 - - - - 132
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Loss for
the period (45) (45)
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Total
comprehensive
income for
the period - - - - - - - (45) - (45)
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
Balance at
31 March
2020 1,010 41,003 (992) 42 1,375 6,753 12,320 (56,168) (46) 5,297
Share based
payments 57 57
Issue of
share capital 1 19 20
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
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
================ ========= ======== ============= ============ ======== =========== ========= ============= ========= ======
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
for the six months ended 30 September 2020
6 months 6 months
to to Year ended
31 Mar
30 Sep 2020 30 Sep 2019 2020
$000 $000 $000
========================================= ============ ============ ===========
Cash flows from operating activities
Operating (loss)/profit for the
period (80) 444 (556)
Depreciation 705 755 532
Amortisation and impairment 609 469 1,068
Share based payments 57 142 290
Changes in working capital:
Decreases/(increases) in trade
and other receivables 143 (124) (1,220)
Increases/(decreases) in trade
and other payables 1,998 (1,460) 860
----------------------------------------- ------------ ------------ -----------
Cash flow from operations 3,432 226 974
Tax (paid)/received (15) (13) 363
----------------------------------------- ------------
Net cash flow from operating activities 3,417 213 1,337
----------------------------------------- ------------ ------------ -----------
Investing Activities
Purchase of intangible assets - - (235)
Capitalised development costs (610) (430) (901)
Purchase of property, plant and
equipment (1,588) (123) (509)
----------------------------------------- ------------
Net cash flow from investing activities (2,198) (553) (1,645)
----------------------------------------- ------------ ------------ -----------
Cash flows from financing activities
Repayment of borrowings (1,083) (532) (246)
Proceeds from borrowings 1,042 - 500
Finance cost (343) (365) (556)
Share and convertible loan issue
costs 19 - -
Issue of Share Capital (net of
costs of issue) 1 16 -
-----------------------------------------
Net cash flow from financing (364) (881) (302)
----------------------------------------- ------------ ------------ -----------
Net Increase/(decrease) in cash
and cash equivalents 855 (1,221) (610)
----------------------------------------- ------------ ------------ -----------
Cash and cash equivalents at the
beginning of the period 1,218 1,828 1,828
----------------------------------------- ------------ ------------ -----------
Cash and cash equivalents at the
end of the period 2,073 607 1,218
----------------------------------------- ------------ ------------ -----------
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 2020.
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 2021
will be prepared in accordance with International Financial
Reporting Standards ("IFRS"), as adopted by the European Union, and
with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
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 2020, and have been
consistently applied, unless stated otherwise.
This condensed consolidated financial information is for the six
months ended 30 September 2020. 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 2020
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 2020 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 2020 and will be
adopted in the 2021 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 2021.
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 Digital Packaging Software Licensing Total
FY21 FY20 FY21 FY20 FY21 FY20 FY21 FY20
H1 H1 H1 H1 H1 H1 H1 H1
$000 $000 $000 $000 $000 $000 $000 $000
===================== ======= ====== =========== ========= =========== ========== ======= =======
Revenue 9,940 9,057 5,522 4,166 931 1,019 16,393 14,242
Segment contribution 1,549 2,798 3,620 2,751 895 974 6,064 6,523
Unallocated cost of
sales (948) (733)
============================== ====== =========== ========= =========== ========== ======= =======
Gross profit 5,116 5,790
============================== ====== =========== ========= =========== ========== ======= =======
16% 31% 66% 66% 96% 96% 31% 41%
Foreign currency translation
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 30 Sep
profit per share 30 Sep 20 2019 31 Mar 2020
============================
No. of shares No. of shares No. of shares
============================ ============== ============== ==============
Basic 74,547,389 74,512,271 74,487,534
Diluted 81,244,707 81,084,168 81,216,774
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 2020 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 .
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END
IR KKCBPOBDDFDK
(END) Dow Jones Newswires
November 10, 2020 02:00 ET (07:00 GMT)
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