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The issues do not appear in the main unique to ZOO and many related companies are having what are hopefully short term concerns. Unless the whole industry folds (unlikely) its short term uncertainty where people may chase other opportunities before coming back. The question is what is short term? For some its 1 minute, others 1 Day or 1 Week, for the more patient 1month or even 1 year
I got out in time but was looking at 60p to purchase - now wondering if this share has a longer and slower way back?
Good point on Directors not buying in.
Looks like we could all have got in at 55p at this rate. It’s all rather disturbing I feel. Wonder why the Directors are not buying on mass if they really believe in the recovery
I’m in at 63p
Significant sales volume all above 60p today, this should be near the end of the sell off and tomorrow buyers to take this back above 70p. Sell off overdone IMO.
Punt trading is for the brave only.
It looks like selling frenzy over, should bounce from here. Sell off overdone as is often the case.
Unfortunately with shares like this when negativity takes hold the only way is down . I’m sitting on a large loss but I think I will sit it out before trying to average down , the old catching a knife scenario.
Wait for 40p !
Maybe I should have paid more attention to the Q1 update rather than the IFRS 15 adjustment. Mea culpa.
On the one hand, I can see why the Writers' Guild strike would be having an impact (it's affecting production and looks set to get worse before it gets better). This is beyond ZOO's control and will be affecting the whole industry.
As regards the wider economic problems and the consequential cost cutting measures being implemented by customers; it doesn't sound far fetched. Inflation was bound to have an impact at some point; the whole point of Central Banks raising interest rates has been to try and dampen demand.
In the short term there's not much ZOO can do other than grit its teeth are ride out the storm. In the medium to long term, if it continues, ZOO will be forced to downsize its workforce. It's a predicament. Businesses, certainly in the UK, don't like to lay off workers unless it's absolutely unavoidable because there's a degree of uncertainty about their ability to re-recruit people of equivalent talent as and when business starts to pick up again (they'd rather bare the cost for now than miss the opportunity when business pricks up; not being able to fulfill customer demand when business picks up can be lot more damaging for the company in the long run - once a contract is lost it can take a lot of time and money to re-engage, if ever).
This doesn't look like anyting other than a normal business "blip" that can happen from time to time. It's part of the normal business cycle (there will always be periods of "boom" and "bust" sprinkled in and around business as normal)
I think the market has made more of this than is warranted. It's simply a timing issue; it doesn't affect cash flow. CY EBITDA actually increases whilst PY EBITDA reduces! They were just trying to match income and expenses; IFRS will play havoc with their KPIs. Depending on the timing of when expenses are incurred you could see their gross margin and EBITDA materially changing from one period to the next without any real, underlying cause, other than simply timing - yet another thing that'll no doubt have to be explained away in the notes to the accounts.
Personally, I don't think IFRS is fit for purpose. It creates far too many wild gyrations which are more often than not taken completely out of all context and often leads to unwarranted share price movements because investors haven't got the time or the knowledge to delve into the notes ot the accounts to undertsand what's actually going on. More and more you are seeing companies providing "alternative" metrics in their accounts so that investors can better understand the underlying trends. IFRS has become a farce.
Well we had a solid interims update, all is great in the wheelhouse, then an II and PI capital raising oversubscribed at 160p now in few short months disaster at 70p. I would imagine significant shareholders will want the BOD or most of them removed….No one likes surprises like this, damages investment proposition credibility.
Well u got your 10%. Now jump the ship
Drop looks overdone here.
Time will tell.
here's a nice short vid on the Spain & Portugal update- possibly worth sharing on twitter:
https://twitter.com/fiveminutepitch/status/1654405575055138816?s=20
• miss on revenue
• acquisition price not disclosed
• acquisition done at a deep discount
looks a bit fishy...
Interesting movement for ZOO shares today, including an Intra-day high of 210p.
One thing worth noting is that ZOO released an unscheduled Trading update prior to the March year-end last year, on 22nd March.
It said that revenues for the full year would be ahead of expectations. With the recent Hollywood studio contract and other other trailed positive business, could we see a repeat next week?
Yes it certainly starts to answer the question at least... it could well by Disney seeing as they were already a decent sized customer but small vs Netflix. Paramount is another option and they've been scaling their offering of late. I'll wait for a bit of profit taking then may take a position...
Sorry missed hollywood clue in RNS
Paramount?
Any guesses
Amazon prime?
hi shearclass - think your question is answered today with the rns !
From their latest annual accounts;
"In FY22 we experienced greater customer concentration with the revenue contribution from our largest client increasing to 78% of sales as a consequence of their international expansion being ahead of their US competitors (FY21: 72%). The second largest customer accounted for 6%, up from 4% last year. These two contracts are expected to continue long-term due to the close relationship and technology integration achieved by ZOO."
As per the capital markets day presentation shared below, Zoo estimated their FY22 market share was ~4%, a market that they estimate is worth ~$1.6b ($70m turnover). This is derived from 9 studios, as per P76 of the CMD presentation, of which Netflix is the largest at $500m.
It seems obvious that 78% of Zoo's FY22 revenue came from Netflix, a total of ~$55m, so we can work out their share of Netflix spend was 11%. We can also work out that their share of the rest of market spend is ~1.5%. I suspect the 6% customer is Disney.
The key questions going forwards are;
- Is Zoo's 11% share of Netflix spend sustainable?
- Can they grow their share of non Netflix spend to anywhere close to 11%?
I think we have to assume their 'long term' revenue target of $400m relates to FY2030, as this is the timeframe given on the previous slide, showing their TAM growing to ~$2.8b by this point. 400/2800 = 14.2%. Not sure why they don't just quote this on slide 77 though...
Of note is that Netflix spend (Studio A), isn't forecast to grow at all between now and FY2030. So their future growth to a 14% industry market share appears to be dependent on generating $345m of revenue ($400m target - $55m netflix), from non Netflix market growth of $1.2b ($1.6b today, growing to $2.8b via internationalisation). That would mean taking 345/1200 = 28.8% of the incremental spend between now and 2030.
To me that looks highly ambitious...
Interested to hear existing shareholder thoughts on the above. On a PE of 25x this looks to have priced in a lot of future growth, if they struggle to gain success with non Netflix customers then I'm not sure how they can attain their near term targets.
On the flipside, if they can replicate their success with Netflix then this is actually very cheap!
Here's a CEO Video for yesterdays results
https://youtu.be/b3wWv1i8CAI
https://marketing.zoodigital.com/hubfs/ZOO%20CMD%202022-10-06.pdf
p77 -they saved the only real new info til late on
well the big news from yesterday capital markets day was the target for $400m long term revenue at 20% operating margin....they expect revenue from Disney alone to double and to sign material new clients who are currently trialling the software
surprised the shares aren't given they were above these levels post the results on 20 September
this stock should be an accelerated proxy on the growth and internationalisation of streaming services-and the rising popularity of international content being translated INTO English not just out of English like in the past
Investor ? ....