Trading Update: Continuing Strong GrowthSource: RNS
23 August 2021
ZOO DIGITAL GROUP PLC
("ZOO" the "Group" or the "Company")
Trading Update: Continuing Strong Growth
Loan Note Conversion
ZOO Digital Group plc (AIM: ZOO), the leading provider of end-to-end cloud-based localisation and media services to the global entertainment industry, today provides an update on current trading and outlook for the half year ending 30 September 2021.
Revenues for the half year are expected to be at least $25 million (FY21H1: $16.5 million), which equates to growth over the first half of FY21 of at least 51% and at least 8% over the second half of FY21 (FY21H2: $23.1 million).
Growth during the first half of the year has been due predominantly to the Company's provision of services to support the migration of catalogue titles to streaming platforms and the associated new territory launches.
In recent weeks some customers have placed orders relating to new titles following the cautious resumption of productions within the industry. The Board anticipates that the associated pipeline of work will build gradually over the coming months.
The Board has moved forward with plans to establish regional hubs and is close to concluding strategic investments that will provide a presence in India, with multiple discussions progressing in other important international locations.
The Company has been in discussions with the holders of its Unsecured Convertible Redeemable Loan Stock instruments concerning early conversion into new ordinary shares of £0.01 each in the capital of ZOO ("Ordinary Shares") at a conversion price of 48 pence per Ordinary Share, ahead of the instrument's redemption date of 31 October 2021. The total principal value of the loan stock is £2.56 million (approximately $3.5 million at a rate of $1.36). Based on these discussions it is the Board's expectation that a majority of the total value of the loan stock will be converted into Ordinary Shares prior to 30 September 2021.
Assuming the full value of the loan stock is converted, the effect will be that the Company's issued share capital will increase by 5.3 million new Ordinary Shares and that current liabilities shown in the consolidated statement of financial position as at 30 September 2021 will reduce by approximately $3.5 million due to the conversion of the loan and a further $4.5 million due to the elimination of the current liability shown as a separable embedded derivative linked to the loan. From 1 November 2021 the savings in finance costs relating to interest on the loan will equate to approximately $263,000 on an annualised basis.
Based on the strong performance in the first half of the year and the pipeline of orders that extends only into the first months of the second half, the Board is confident of exceeding current full year revenue expectations. The additional gross profit generated will be utilised to continue to invest for future growth and take advantage of the many opportunities present in our marketplace to build our business further.
Stuart Green, CEO of ZOO Digital, commented,
"ZOO has started the new financial year very positively, delivering significant growth over the first half and building on last year's momentum. New title production is beginning to resume and we expect this work to gradually return to previous levels. This, combined with the continually increasing demand for our services that support the migration of back catalogue content for streaming, gives us confidence in achieving our long-term financial goals."
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
The person responsible for making this announcement on behalf of the Company is Phillip Blundell, Chief Financial Officer.
For further enquiries please contact:
ZOO Digital Group plc
+44 114 241 3700
Stuart Green - Chief Executive Officer
Stifel Nicolaus Europe Limited
Fred Walsh / Tom Marsh
+44 207 710 7600
Matthew Smallwood / Hannah Campbell
+44 207 457 2020
About ZOO Digital Group plc:
ZOO Digital supports major Hollywood studios and streaming services to globalise their content and reach audiences everywhere, by providing world-leading, technology-enabled localisation and media services.
Founded in 2001, ZOO Digital operates from hubs in Los Angeles, London and Dubai, with a development and production centre in Sheffield, UK. The company is targeting $100m sales in the medium term.
The Group provides media services through its platforms that include: ZOOsubs, ZOOdubs, ZOOstudio. Its full-service proposition delivers the end-to-end services required to prepare both original and catalogue content for digital distribution; these services include dubbing, subtitling & captioning, metadata creation & localisation, artwork localisation and media processing. Alongside this offering, ZOO also provides its customers with management platforms and strategic solutions to support their own internal globalisation operations.
ZOO is a go-to service partner for media businesses looking to globalise their content across different territories, languages and distribution platforms. Using its innovative technology-enabled approach, ZOO helps its customers to reduce time to market, lower costs and deliver high quality products to their global audiences. The business has frameworks in place with all major Hollywood studios and streaming services. Its customers include Disney, NBCUniversal, HBO and ViacomCBS.
ZOO's competitive advantage arises from three interlinking factors - the leading role it has played in the digital transformation of its sector; the world class proprietary platforms that it develops to enable this transformation; and the global supply chain of thousands of freelancers, working collaboratively in ZOO's platforms, which delivers services that scale easily to meet demand. These factors combine to make ZOO uniquely geared to capitalise on new market opportunities in a fast-paced and constantly evolving industry.