Zoo Digital Regulatory News (ZOO)

23 Jan 2006 13:00

Zoo Digital Group PLC23 January 2006 ZOO DIGITAL GROUP PLC("ZOO" or "the Group") TRADING UPDATE AND STRATEGIC REVIEW ZOO Digital Group PLC, the DVD technology and video games publisher, todayannounces a trading update. Following disappointing revenues in its video gamespublishing business, results for the Group for the full year will be materiallybehind market expectations. Whilst the new DVD interactive games marketpioneered by ZOO performed well, sales in the traditional video games businesswere disappointing reflecting the overall trend in the market and lower thanexpected Christmas trading volumes from retailers. ZOOtech, the technology division of the Group, continues to focus its activitieson licensing its innovative proprietary technology. As stated at the time ofthe release of the interim results on 14 December 2005, it is clear that theNorth American market offers ZOOtech significant opportunities including thepotential for large individual deals with major corporates. The Group continuesto make progress on several significant contracts which it is focused oncompleting within the next few months. The overall effect on the Group is that the results for the year to 31st March2006 are likely to fall significantly below market expectations and the Groupmay report a loss. Strategic Review Due to challenging market conditions in video games publishing, thedisappointing results for the titles produced and published and the problems ofproduct slippage from suppliers versus the growth experienced in the consumerinteractive DVD market, the Group is undertaking an immediate review of itsstrategy. The Group will also undertake a full review of its management andoperations, through all operating divisions, and has immediately implementedcost saving measures. ZOO will announce further trading updates with regards to the strategic,management and operating review, and the likely effect this will have on theGroup's financial performance for the year to 31st March 2006. Enquiries: Ian Stewart James Chandler/Helen ThomasCEO, ZOO Digital Group plc Weber Shandwick Square Mile0114 241 3700 020 7067 0747 John Llewellyn-LloydNoble & Company Limited020 7763 2200 Notes to Editors: About ZOO Digital Group PLC ZOO is divided into two separate divisions; ZOOtech Ltd ("ZOOtech") and ZOODigital Publishing Ltd ("ZDPL"). ZOOtech Ltd ("ZOOtech") ZOOtech focuses on R&D and licensing of DVD-EXTRA, the Group's highly originaldevelopment software capable of creating complex interactive content forstandard DVD players. The strategy for ZOOtech is simple; to create the industrystandard tool for the production of interactive DVD content and drive revenuesthrough licensing worldwide in a combination of up front fees and royalties. ZOO Digital Publishing Ltd ("ZDPL") ZDP focuses on the publishing and distribution of interactive entertainmentproducts across multiple platforms such as interactive DVD, PS2, Xbox, GBA andPC. This information is provided by RNS The company news service from the London Stock Exchange