Revenues ‘edge up’ at ZOO digital in a year it was rocked by a contract loss

Sheffield-headquartered ZOO Digital,  the subtitling specialist for the entertainment industry, has seen revenues “edge up” and has improved profitability despite a second half  which was affected by the loss of a project.

This morning reporting on its annual results ended 31 March 2019, the listed firm said revenue “edged up” to $28.8m (2018: $28.5m). In January, the firm had warned that its revenues would be 10% lower than it expected because of the contract loss, which was due to be from a major client.      

However, the firm returned to profit – reporting pre-tax profits of $1.3m; a shift from the $5m pre-tax loss reported in the previous year. But its adjusted EBITDA now stands at $400,000, reduced from $2.4m.

In the year, its localisation revenues grew by 4% “despite disruption in the market due to changes in the supply chain of a major client.”

It continued its adoption of cloud-based dubbing service, with number of major studio customers doubling in year and was confirmed as a Netflix Preferred Fulfilment Partner.

ZOO Digital said it its expansion of capacity continued, including the launch of the ZOO-Enabled Dubbing Studio programme with 70 facilities enrolled across 22 key countries, together with significant increase in the freelancer network.

Talking about the outlook, ZOO Digital said that there was “ongoing supportive market dynamics, with the increase in digital entertainment content and expansion of distribution channels driving a growing demand for high quality and scalable content localisation and digital packaging services.”

Gillian Wilmot has been appointed to the Board as Chairman with effect from 1 July 2019, replacing Roger Jeynes who will step down after serving a nine-year tenure.

Stuart Green, CEO of ZOO Digital, said: We have worked hard over the course of the year to enhance our offering, build up our network and differentiate ourselves further from the competition. ZOO now has the technology, the people and the local expertise to enable our clients to deliver content across multiple territories and in multiple languages simultaneously and efficiently. To be chosen as a primary vendor of localisation services for large media companies requires us to demonstrate significant global capacity, and in this regard, we have made excellent progress that puts us in good stead as we continue to grow. 

“Trading in the new year has begun well. Whilst the significant decline in legacy DVD and Blu-ray formats in our digital packaging segment has continued, now leading us to not forecast any significant income from this business line in the future, this has been offset by strong growth related to Over-the-Top (OTT) delivery. We expect ZOO to be confirmed as a preferred vendor to a greater number of clients and lines of business during the course of the year ahead. Our caution around timing is reflective of the dynamic nature of the OTT marketplace and recent experience.

 “The end market into which we are selling our cloud-powered services continues growing and the traction that we are gaining with each of our services gives us great confidence that the business is well placed to meet opportunities and growth in the years to come.”

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