Zoo Digital Regulatory News (ZOO)

10 Apr 2008 07:01

Zoo Digital Group PLC10 April 2008 ZOO Digital Group plc (the "Company") Contract win and trading update Contract wins ZOO Digital Group plc (AIM: ZOO.L), the digital media technology and servicesgroup, is pleased to announce that it has secured a material contract to deliversoftware automation products including its recently launched Media AdaptationTool (MAT) to Walt Disney Studio Motion Pictures International. The contractwill provide a minimum income of $15 million over its fifteen year term. In addition, Sony Pictures Entertainment has licensed ZOO's Templated AuthoringSystem ("TAS") and will shortly be in production of standard definition DVDtitles using this innovative productivity tool. Through Sony the Board expectsthat TAS revenues will increase considerably in the current financial year. Trading ZOO announces that group turnover from continuing operations for the year ended31st March 2008 was approximately £3.3 million, an increase of 119 per centcompared to the previous year. Losses before interest, tax, depreciation,amortisation and exceptional items were £1.4 million, in line with managementexpectations. The acquisition of Scope Seven has significantly improved ZOO's ability topenetrate the US market. As anticipated, the termination of our relationshipwith GDMX, announced in December 2007, has held back revenue growth but theDirectors believe that this has created a more stable business with highermargins. The Board remain confident about the future prospects for Scope Seven,particularly in light of the strong order book expected to generate significantrevenues. We have seen a significant increase in the production of DVD games in the USthrough Scope Seven. A number of major US clients including Hasbro and Mattelare now providing a considerable throughput of new projects made possiblethrough ZOO's DVD-EXTRA technology. The uncertainties in the next generation home video market were resolved inearly 2008 as a result of Warner's and Toshiba's discontinuation of support forHD DVD. As a consequence, ZOO now sees significant opportunities in the area oftechnology and services for Blu-ray title production. We are accelerating thedevelopment of Blu-ray products which will be deployed by Scope Seven to provideservices for current and prospective Hollywood clients. Exceptional item The Board has been notified that ZOO Interactive Entertainment Limited (ZIE),formerly owned by ZOO, has appointed a liquidator. We have therefore fullyprovided against the £175,000 owed by ZIE to ZOO in deferred consideration,together with royalty payments of £40,000 due to ZOO in March 2008. This has nosignificant implications for our trading in the future. Cash balances The cash position was approximately $1.3 million as at 31st March 2008 and withinitial payments on the above deals and the cost rationalisation programmeexpected to preserve cash to the extent of $2.4 million, the Board is confidentthat the Group will be cash positive within the current financial year Outlook As a result of these and anticipated contract wins the Board is confident thatZOO will see significant growth in revenues in the current financial year. Wehave rationalised the cost base with the aim of achieving monthly profitabilityduring the current financial year. With the introduction of new major customersand additional revenue streams based on a proven, market-tested product set theBoard looks forward to a year of significant progress both financially andoperationally. For further enquiries please contact: ZOO Digital Group plc Tel: 0114 241 3700Stuart Green - Chief Executive OfficerHelen Gilder - Group Finance Director KBC Peel Hunt Ltd Tel: 020 7418 8900Richard KaufferDaniel Harris Weber Shandwick Financial Tel: 020 7067 0700Nick DibdenJohn Moriarty Notes to Editors About ZOO Digital Group plc ZOO Digital Group plc is an international technology and services company thattargets the digital media production market through conceiving, developing anddeploying innovative software solutions to enable efficient production services. The Group has two subsidiaries, ZOOtech Limited and Scope Seven LLC. ZOOtech isresponsible for creating ground-breaking software products whilst Scope Sevenprovides digital media production services, including video compression,authoring and interactive title development. ZOO is focused on the worldwide digital media production markets and inparticular video production for entertainment, games and education applications,with customers including Hollywood studios and other producers and publishers ofvideo-based products. The Group provides innovative software technologies thattransform digital workflows through radical process re-engineering combined witha range of associated production and custom development services. About ZOO's subsidiaries ZOOtech supplies innovative digital asset solutions for multi-nationalcompanies, based around its widely patented automation software suite. Thesesolutions are customised for each client and enable a very rapid simplifiedproduction of multiple versions of media. ZOOtech's expertise ranges fromBlu-ray disc authoring to DVD menu and printed material regionalisation andadaptation. It has long-standing relationships with some of the biggest namesin home entertainment. ZOOtech pioneered DVD-EXTRA technology to enable CD-ROMstyle interactivity in the DVD-Video format. Read more http://www.zoo-tech.com/ Scope Seven is a media production and design company providing creative andtechnical services to companies in the entertainment, games and educationindustries. The company is based in Los Angeles and has clients in Hollywoodand worldwide. Read more http://www.scopeseven.com/ This information is provided by RNS The company news service from the London Stock Exchange