ZOO Digital shares slide as firm meets for AGM
ZOO Digital’s shares took a hit following the media localisation company’s trading update yesterday, when it warned of first-half losses amid Hollywood strikes and client realignment.
Shares fell from Tuesday’s closing price of 52p to 27p as the London Stock Exchange opened yesterday, but climbed in morning trading to reach a daily high of 44p before falling back top close at 40p.
The firm’s AGM last night approved all resolutions.
The firm’s share price has fallen by 80% since the start of the Hollywood writers’ and actors’ strikes, from a 12-month high of 206p in March. The firm uses cloud technology and international acquisitions and partners to enable it to translate media quickly for major Hollywood studios and streaming services.
Nevertheless, analysts remained optimistic. Panmure Gordon continued to advise buying. In a flash note yesterday, director Jonathan Barrett wrote, “The ferocity of the impact of client spend volatility and dual actors/writers strike is plain to see. However, ZOO will exit this testing period with a more efficient cost base, share rosters with fewer competitors and have arguably the most efficient and scalable offer, and so should see revenues and profits recover rapidly as industry conditions normalise.
“Valuation upside remains high even on our cautious TP basis, but clear evidence of recovery remains a required catalyst. Well positioned businesses with very depressed values may attract strategic interest so there is some support form this.”