ZOO Digital Group plc (LON: ZOO), the provider of cloud-based localisation and digital distribution services for the global entertainment industry, today announces its unaudited financial results for the six months ended 30 September 2019.
HIGHLIGHTS
Key Financials
· Revenues decreased by 4% to $14.2 million (H1 FY19: $14.9 million) driven by a 75% drop in legacy DVD and Blu-ray services, which now make up 3% of overall Group revenue; excluding DVD/Blu-ray services revenues were up 7% to $13.8 million (H1 FY19: $12.9 million) with strong demand for digital packaging and subtitling
· Gross profit up at $5.8 million (H1 FY19: $4.9 million) explained by a favourable sales mix
· Adjusted EBITDA1 of $1.8 million (including $0.6 million due to IFRS 16 reclassification of leases) (H1 FY19: $0.5 million), the improvement reflects the positive gross profit variance
· Operating profit of $0.4 million (H1 FY19: $0.3 million loss)
· Cash balance of $0.6 million at period end (H1 FY19: $0.9 million)
Operational Highlights
· Selected as a primary vendor of localisation and digital packaging services for a major Over-The-Top (OTT) platform
· ZOOstudio adopted by a major media company to manage its localisation operations for OTT production
· Received a Product of the Year award at the National Association of Broadcasters (NAB) Show 2019 for ZOOstudio and the Broadcast Tech Innovation Award 2019 for excellence in localisation for a global TV project
· Launch of ZOO Localisation Ecosystem
· Appointment of Gillian Wilmot as Non-Executive Chairman
Outlook
· On-going market changes and OTT platform launches offer significant opportunity for growth
· Recently established customer relationships provide the scope for significant repeating revenue over multiple years
· Innovative, technology-led approach to address specific needs of OTT market provides ZOO with distinct competitive advantage over traditional localisation vendors
· The value of the order book at the period end is stronger than the same period last year and positions ZOO well to meet market expectations for the full year
1 adjusted for share-based payments.
Stuart Green, CEO of ZOO Digital, commented,
“We are pleased with the progress we have made during the period, having met all operational targets in respect of our strategic priorities. We are now a primary vendor of localisation and digital packaging services for a major new OTT platform and have achieved the first customer deployment of ZOOstudio, our localisation management platform.
“The OTT consumer video market is about to undergo a step change due to the forthcoming launches of several Direct-to-Consumer services from major media companies. These provide an exciting growth opportunity in media localisation and digital packaging given the increased demand for these services to enable international distribution. We believe that ZOO is well placed to capitalise on this opportunity given the benefits and competitive advantages of our cloud-powered services.”
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