Zoo Digital Group PLC Pre-Close Trading Update (1245H)
23 Marzo 2020 - 8:00AM
UK Regulatory
TIDMZOO
RNS Number : 1245H
Zoo Digital Group PLC
23 March 2020
23 March 2020
ZOO DIGITAL GROUP PLC
("ZOO", the "Group" or the "Company")
Pre-close Trading Update
ZOO Digital Group plc, a world-leading provider of cloud-based
localisation and digital distribution services to the global
entertainment industry, today issues the following trading update
in respect of the year ending 31 March 2020.
Group revenue for the year is expected to be approximately $30m,
representing an increase of around 4% over the prior year and with
H2 revenues up at least 12% over the first half. Localisation and
digital packaging revenues are expected to grow by around 10% to
$27m.
The Company has successfully executed its core strategy of
partnering with major media companies to provide localisation and
digital packaging. This resulted in the company's first appointment
to deliver end-to-end services, two further engagements as a
preferred vendor and the successful deployment of ZOOstudio for
managing OTT localisation and digital packaging operations. These
recent successes demonstrate that our software, coupled with our
industry knowledge and skills, are gaining traction in the market
for Over The Top (OTT) localisation and digital packaging. We have
continued to invest in our capacity to deliver these services
throughout the period to take advantage of a growing market
opportunity. As a result, the Company expects to report EBITDA for
the year of not less than $2.2m, up from $0.4m in the prior year
period.
The success in winning new long-term service contracts and
building the necessary software integrations has meant that
revenues for FY20 have been weighted to the second half, with H2
revenues of approximately $16m, up 12% on last year. This has also
impacted short-term working capital and the year-end cash position
is expected to be an overdraft of circa $1m, utilising a third of
our facility. Shortly after the year end we expect this position to
reverse as our customers, primarily major global media companies,
settle their invoices and cash should exceed $2m. The Board does
not anticipate a requirement for any additional working
capital.
We are currently seeing a renewed focus on the localisation of
back catalogue titles from a broader range of clients as demand for
content for the OTT platforms gathers pace. This follows a period
during which we have experienced some softening of sales due to a
temporary hiatus of orders as our customers have implemented
business continuity plans. Regarding original content, the COVID-19
outbreak is impacting our customers, with new title production
being significantly hampered due to restrictions on travel and
group gatherings. However, the Company's strategy of delivering
services through proprietary cloud-based software provides natural
resilience in these circumstances; steps have already been taken
for staff to work from home without any significant disruption to
production, and our network of freelancers is largely
unaffected.
As we approach the start of the new financial year we are
currently experiencing higher levels of interest in our cloud-based
localisation services from major media companies. Given that the
full impact of COVID-19 on our customers remains unclear, the Board
does not believe it is prudent to provide guidance on the potential
full year outcome for FY21 and FY22 at this time. Due to the
robustness of ZOO's business model and the strength of its customer
relationships, the Board is confident of being well positioned for
growth and remains confident in the long-term success of the
business.
The Company has noted the FCA moratorium on the publication of
preliminary results and will provide an update as to when it
intends to publish its full year results to 31 March 2020 in due
course, in the meantime ZOO will continue to update shareholders as
and when appropriate.
The information communicated in this announcement includes
inside information for the purposes of Article 7 Regulation
596/2014.
For further enquiries please contact:
ZOO Digital Group plc +44 (0) 114 241 3700
Stuart Green - Chief Executive Officer
---------------------
Phillip Blundell - Chief Finance Officer
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Stifel Nicolaus Europe Limited
Fred Walsh +44 (0) 20 7710 7600
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Alma PR
Josh Royston / Hilary Buchanan / Helena Bogle +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 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 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 digital distribution, subtitling
& captioning, metadata creation & localisation, dubbing,
artwork localisation, workflow and asset management.
www.zoodigital.com
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London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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