Zoo Digital Regulatory News (ZOO)

19 Jan 2007 11:39

Zoo Digital Group PLC19 January 2007 For immediate release 19 January 2007 ZOO DIGITAL GROUP PLC ("ZOO" or "the Group") TRADING UPDATE ZOO Digital Group plc today announces an update on trading following theChristmas period. ZOO Interactive Video Limited ("ZIV") Current indications show that the Christmas retail sell-through of the consumerproducts created by the now discontinued interactive DVD publishing business,ZIV are behind our expectations, and consequently results for the Group for thefull year will be materially behind market expectations. The Group closed ZIV,the interactive DVD title developer, in October 2006 and is retaining revenuesfor the products developed prior to its closure. Although it is disappointing that the financial performance of ZIV is expectedto fall behind original expectations, leading to a significant shortfall inrevenue, this supports the Board strategy to withdraw from the business ofacquiring intellectual property rights for consumer product development. ZOOtech Limited Following the refinancing of the Group in September 2006, a strong cash positionof approximately £1.75 million on the balance sheet has allowed the Board tofocus purely on ZOOtech, the technology division. ZOOtech earns revenues frominteractive DVD royalties and its Regionalisation Tool and Templated AuthoringSystem. Interactive DVD royalties have been affected by the lower than expectedsell-through of these consumer products. However, ZOOtech has been successful insecuring on-going utilisation-based contracts for its Regionalisation Tool andTemplated Authoring System. The Board is confident that these will generaterecurring revenues on a monthly basis, reducing ZOO's dependency on the seasonalinteractive DVD market and creating a more predictable business profile. The user base for DVD-EXTRA continues to grow and expand into new territories.Interest from Hollywood studios in the Regionalisation Tool and the TemplatedAuthoring System, which deliver significant benefits for the video titleproduction industry, continue to be received enthusiastically and the Boardexpects these to build a recurring revenue stream for the ongoing future growthprospects of the Group. - ends - Enquiries: ZOO Digital Group plc Tel: 0114 241 3700Stuart Green - Chief Executive OfficerHelen Gilder - Group Finance Director KBC Peel Hunt Tel: 020 7418 8900Richard Kauffer Weber Shandwick Tel: 020 7067 0700Chris Lynch/Helen Thomas Notes to Editors ZOO Digital Group ("ZOO") is an innovative software solutions company that helpsvideo publishers and rights owners maximise revenues and profits by exploitingtheir content across multiple platforms, languages and territories. ZOO has aportfolio of over 60 patents (granted or pending) and a depth of knowledge indigital media processes which has few rivals. ZOO's key products include: Interactive DVD software - world leading tool for creating interactive DVDs.Most of the interactive titles played on any household DVD player are made withZOO's software. Notable titles include "Who Wants to be a Millionaire?","Question of Sport" and "Madagascar - Animal Trivia Game". Linear DVD production software - technology to automate the production of linear(movies & TV shows) digital media. With this automation comes a significantreduction in time-to-value for the intellectual property, as well as radicallychanging the economies of publishing back catalogues. Multi-language production software - technology to 'localise' text that appearsin digital media. This software automates the localisation process for videopublishers. Previously, highly-skilled technicians were required to manipulategraphical data. Now, with ZOO's software, text that needs translation isextracted and replaced with corresponding translations - reducing time, errorsand labour costs. This information is provided by RNS The company news service from the London Stock Exchange