Revenues climb for fourth successive year at technology group

Sheffield-based ZOO Digital has recorded its fourth successive year of strong revenue growth in its audited financial results for the year ended 31 March 2023.

Revenue grew by 28% to $90.3m/£70.9m (FY22: $70.4m/£55.3m) with reported profit before tax of $7.9m/£6.2m (FY22 loss restated: $200,000/£157,000).

However, ZOO, which works with major Hollywood studios and streaming services to globalise their content by providing localisation and media services, has also seen its current trading hit by what it describes as short-term market disruption.

This includes several major streaming companies carrying out strategic reviews to refocus on profitability and the first simultaneous strike of US writers and actors in 60 years.

Stuart Green, CEO, said: “While the current disruption is frustrating, the Board remains confident ZOO is fundamentally well positioned to continue our growth once the hiatus concludes.”

Commenting on the overall results he added: “We expanded our footprint in strategically important, high-growth regions. We generated strong cashflows and delivered record pre-tax profitability, demonstrating the benefits of the operational leverage in the business.

“The market has evolved rapidly over recent years as global audiences transition from traditional linear programming to streaming platforms.

“Localisation is one of the most cost-effective ways to bring new content to global audiences, while also providing access to new markets and millions of additional subscribers. This is why we are investing ahead of the curve to expand our footprint in key international territories.”

The business adds it has been taking steps to adjust its cost base to reduce the impact of the current temporary industry slow-down on its business while there remains uncertainty around the timing of the resumption of former levels of production and orders.

The group note it remains financially strong with net cash at 30 June 2023 of $23m/£18m.

ZOO says it expects to emerge in an even stronger position once certain customers have rationalised their supplier bases, which should lead to the group taking further market share once former order levels resume. The business expects this to happen in H2 FY24.

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