Technology group’s share price crashes 35%
Shares in technology group ZOO Digital crashed 35% this morning after it warned its first-quarter revenues have been weaker than its already-pessimistic expectations.
It blamed cost-saving measures at some of its major streaming company clients and the ongoing writers’ strike in America.
ZOO Digital works with major Hollywood studios and streaming services to globalise their content by providing localisation and media services.
The group’s share price has fallen by two-thirds since March as it struggles with what it described as “a well publicised hiatus in the normal flow of orders across the industry”.
However the Sheffield-based group is more upbeat about its longer-term prospects and it expects revenues to grow again in the second half of the financial year.
In a statement, it said: “Despite the short term industry-wide uncertainty…ZOO expects to be in an even stronger position with several customers following a rationalisation of their supplier bases with ZOO selected as one of a smaller number of vendors.
“Consequently, the board expects the company to take further share of the media localisation market once former business levels resume.”
Separately, ZOO’s auditor, Grant Thornton, has advised changes to its results based on its interpretation of IFRS 15.
It will now align third-party costs with when supplier invoices are received, and not be matched with revenue.
The impact of this is expected to be an increase in adjusted EBITDA for this financial year of $2m and a decrease in last year;s adjusted EBITDA of $1.2m.
