Losses at entertainment industry specialist in year of ‘unprecedented challenges’
ZOO Digital Group, which offers cloud-based localisation and media services to the global entertainment industry, says it suffered a significant decline in revenues and profits in its final results for the year ended 31 March 2024.
The Sheffield-headquartered business noted that it had been on a strong growth trajectory, reaching over $90m in sales in FY23, only to then be hit by a “black swan” event in the form of strike action by film writers and actors in Hollywood.
Revenue fell by 55% to $40.6m/£31.2m (FY23: $90.3/£69.5m) due to the industry-wide disruption of 2023 and the hiatus in media production and orders that followed.
Zoo Digital also made a reported loss before tax of $20.5m/£15.8m (FY23: profit of $7.9m/£6m).
Stuart Green, CEO, said: “It has been a year of unprecedented challenges for the entire film and television entertainment industry as the Hollywood writers and actors strikes brought new productions to a standstill.
“This has required difficult decisions to conserve cash while positioning the business for the market recovery that is in progress.
“Customer demand has improved recently as delayed 2023 productions have completed, with ZOO’s technology platforms, global reach and trusted reputation positioning us well as the recovery continues.
“We view the market disruption as a symptom of a sector undergoing structural change away from linear and towards streaming on demand. With this comes a preference for vendors that can deliver multi-platform, multilingual content across international markets.”
The Hollywood writers’ and actors’ strikes were resolved in September and November 2023 respectively, with Zoo Digital explaining that since then there has been a gradual resumption in new productions.
The business points out that despite last year’s problems it remains well positioned for recovery, able to respond quickly to increased customer demand, leading to long-term growth.
It has been selected by a major film and TV distributor as a primary vendor for dubbing and subtitling in FY24. Orders are now being received, and meaningful contribution is expected from FY25.
In its outlook statement, Zoo Digital highlights improved trading in the first quarter of FY25, with sales up 35% over the prior quarter.
