‘Frustrating’ year-end result for listed subtitling specialist, says CEO
The CEO of Sheffield-headquartered ZOO Digital Group, the subtitling specialist for the entertainment industry, has said that the full-year results for the listed firm’s full 2019 are “frustrating” the firm this morning warned its profitability has been hit.
This morning issuing a trading update for the year ended 31 March 2019, chief executive of ZOO Digital, Stuart Green, said: “The financial outturn for 2019 is frustrating, having been impacted by market shifts and client disruption, but we are pleased that the business has grown and been cash generative. We have been able to meet our investment and operational objectives which leave us well placed in markets globally where the requirement for premium media localisation clearly continues to increase.
“We believe demand for our cloud-based services is building, client adoption is accelerating and our recently launched ZOOstudio platform has been well received in the market. We are confident for the future.”
The listed firm said it had continued to invest in accordance with its plans and the Company was “well positioned to respond to a rapidly changing entertainment industry and the boom in demand for TV and movie content via streaming services.”
ZOO Digital added: “This investment, together with the faster than expected acceleration in the decline in legacy packaged media revenue, which does not form part of ZOO’s long-term strategy, has impacted on profitability such that adjusted EBITDA in the second half will be around break-even (H1: $500,000).”
The group has been cash generative in the second half by focusing on strict working capital management, despite lower than anticipated profitability. This led to its having a net cash balance of $1.8m at the year-end , which is double the amount at the half year stage with no debt other than the convertible loan notes. “The business is therefore well-placed to grow organically during the forthcoming financial year,” added ZOO Digital
The firm said its revenue for the year was expected to be in line with expectations at $29m, up from $28.5m last year. Total localisation revenues grew 5% to $22.6m against a strong comparative figure that included a one-off project with a value of $2.5m for a major studio. Within this, subtitling revenues “recovered strongly” and cloud dubbing service revenues were up 17% for the year during which ZOO was engaged on initial projects for eight major TV and film production studios (FY18: four).
ZOO added that the benefits its investment were “apparent insofar as the ZOOstudio localisation platform, launched during the year, has received a ‘Product of the Year’ at the prestigious NAB Show awards. The Group is in discussions with significant industry players with regard to their adopting this platform.”
