Last checked at 28 Sep 2023 07:00
28 September 2023
ZOO DIGITAL GROUP PLC
("ZOO", the "Group" or the "Company")
AGM Statement and Trading Update
ZOO Digital Group plc (AIM: ZOO), a leading provider of end-to-end cloud-based localisation and media services to the global entertainment industry, will hold its Annual General Meeting (AGM) at 5.00pm BST today. At the meeting, Gillian Wilmot, Chairman, will make the following statement:
"The market disruption and temporarily subdued demand for localisation and media services outlined in the full year results on 10 August 2023 are continuing. Major media organisations are in the process of realigning for profitability, and industrial action by writers and actors is ongoing. Consequently, visibility remains limited, and resolution of the strikes is essential for normal order flow to resume. There has been encouraging progress over the last week in negotiations between the Writers' Guild of America and the Association of Motion Pictures and Television Producers resulting in a provisional deal that it is expected will pave the way for writers to resume work.
"Despite this progress, the ongoing disruption continues to have a significant short-term impact and market expectations for ZOO's FY24 outcome assumed former order levels would resume from October 2023. This now looks unlikely, and therefore a range of revenue outcomes for the second half of the financial year is possible ranging from a similar level to the first half to an increase in revenue in Q4.
"Whilst orders are being processed monthly, they have been and continue to be at historically low levels such that H1 revenues are expected to be approximately $21 million, leading to a significant EBITDA loss for the first half of the current financial year. However, the Company is in a strong financial position with net cash at 30 September 2023 expected to be no less than $16 million.
"The Board has taken steps to mitigate ZOO's position through the implementation of cost reductions with the objective of achieving break-even in respect of fiscal Q4. The terms of the planned acquisition of the Company's partner in Japan have been renegotiated and the parties have agreed to defer completion until order flow has normalised.
"The Board is confident that the changes arising from strategic reviews by ZOO's major customers will be favourable for the Group. These include accelerated transition to an End-to-End approach, studios engaging with fewer, more capable suppliers, and greater dependence on ZOOstudio, all of which will strengthen ZOO's market position. ZOO continues to make good progress in cementing its relationships with existing and potential new customers even during this period of temporary disruption.
"ZOO's strategy is in alignment with the needs of its current and potential customers and the Board expects the Group to be well positioned for enhanced growth once former order levels resume, in line with our medium and long-term aspirations. The structural drivers for international, multilingual content remain firmly in ZOO's favour.
"The Board will manage ZOO's cash position carefully whilst protecting production capability and capacity to enable a rapid rebound of revenues when orders return. To support this the Board will continue to pursue small investments in strategic locations at attractive valuations that strengthen ZOO's proposition for international dubbing."
Presentation slides that will accompany an investor update following the AGM will be available on the Company's website later today. Shareholders may register to join a live stream of the AGM and investor briefing here: https://www.zoodigital.com/agm-2023
The Company intends to announce its interim financial results for the six months to 30 September 2023 in November 2023.
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for making this announcement is CEO Stuart Green and CFO Phillip Blundell.
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About ZOO Digital Group plc:
ZOO Digital supports major Hollywood studios and streaming services to globalise their content and reach audiences everywhere, by providing leading, technology-enabled localisation and media services.
Founded in 2001, ZOO Digital operates from hubs in Los Angeles, London, Dubai, Turkey, South Korea, India, Denmark and Spain with a development and production centre in Sheffield, UK.
The Group provides media services through its platforms that include: ZOOsubs, ZOOdubs and ZOOstudio. Its full-service proposition delivers the end-to-end services required to prepare both original and catalogue content for digital distribution; these services include dubbing, subtitling & captioning, metadata creation & localisation, mastering, artwork localisation and media processing. Alongside this offering, ZOO also provides its customers with management platforms and strategic solutions to support their own internal globalisation operations.
ZOO is a go-to service partner for media businesses looking to globalise their content across different territories, languages and distribution platforms. Using its innovative technology-enabled approach, ZOO helps its customers to reduce time to market, lower costs and deliver high quality products to their global audiences. The business has frameworks in place with all major Hollywood studios and streaming services. Its customers include Disney, NBCUniversal, HBO and Paramount Global.
ZOO's competitive advantage arises from three interlinking factors - the leading role it has played in the digital transformation of its sector; the world class proprietary platforms that it develops to enable this transformation; and the global supply chain of thousands of freelancers, working collaboratively in ZOO's platforms, which delivers services that scale easily to meet demand. These factors combine to make ZOO uniquely placed to capitalise on new market opportunities in a fast-paced and constantly evolving industry.
www.zoodigital.com