TIDMZOO
RNS Number : 0518G
Zoo Digital Group PLC
14 July 2023
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 as retained as part of UK
law by virtue of the European Union (Withdrawal) Act 2018 as
amended. Upon the publication of this Announcement, this inside
information is now considered to be in the public domain.
14 July 2023
ZOO DIGITAL GROUP PLC
("ZOO", the "Group" or the "Company")
Trading Update
IFRS 15 guidance and update on Q1 trading
ZOO Digital Group plc (AIM: ZOO), a leading provider of
end-to-end cloud-based localisation and media services to the
global entertainment industry, today provides guidance on its
interpretation of IFRS 15 ahead of full year results, which are now
expected to be announced in early August 2023, and an update on Q1
trading.
IFRS 15 guidance
As part of the audit work for the year-end 31 March 2023 the
Company has received revised guidance from its auditors with
regards to the interpretation of IFRS 15. Specifially, that third
party costs should not be matched with revenue, as per the
Company's existing accounting policies, but rather as supplier
invoices are received. Revenues are not affected by this
change.
Subject to finalisation of audit procedures and technical
review, the effect of this accounting policy change is expected to
be an increase in adjusted EBITDA for FY23 of approximately $2
million and an expected downwards restatement to adjusted EBITDA of
approximately $1.2 million in FY22.
Update on Q1 trading
First quarter FY24 trading has been impacted due to a well
publicised hiatus in the normal flow of orders across the industry,
resulting in lower revenues than previous management expectations
in a quarter that the Board already expected to be weaker than the
previous year.
This has been caused by two short-term market factors that are
affecting the wider industry. Firstly, several of ZOO's major
streaming company clients have for some months been implementing
cost-saving measures and reorganising their operations as the
industry evolves and confronts higher levels of competition,
leading to the deferment of some costs. Secondly, the Writers Guild
of America strike is in its third month and this is now having an
impact on the levels of localisation and media services work on new
titles.
Despite the short term industry-wide uncertainly alluded to
above, ZOO expects to be in an even stronger position with several
customers following a rationalisation of their supplier bases with
ZOO selected as one of a smaller number of vendors. Consequently,
the Board expects the Company to take further share of the media
localisation market once former business levels resume. It is
reasonable to expect this to be in the second half of the current
financial year, and on this basis the Board currently expects
revenue growth to return in the second half of FY24.
The Group is financially strong with net cash of $23 million as
at 30 June 2023.
ZOO continues to have positive, advanced discussions with a
leading Japanese technology company regarding the acquisition of
its localisation subsidiary.
The persons responsible for arranging for the release of this
Announcement on behalf of ZOO are Stuart Green, Chief Executive
Officer and Phillip Blundell, Chief Financial Officer of ZOO.
For further enquiries, please contact:
ZOO Digital Group plc +44 (0) 114 241 3700
Stuart Green - Chief Executive Officer
Phillip Blundell - Chief Finance Officer
Kam Bansil - Investor Relations
Stifel Nicolaus Europe Limited (Nominated
Adviser and Joint Broker) +44 (0) 20 7710 7600
Fred Walsh / Tom Marsh / Richard Short
Singer Capital Markets (Joint Broker) +44 (0) 20 7496 3000
Shaun Dobson / Asha Chotai
Instinctif Partners (Financial PR) +44 (0) 207 457 2020
Matthew Smallwood / Joe Quinlan zoo@instinctif.com
About ZOO Digital Group plc:
ZOO Digital supports major Hollywood studios and streaming
services to globalise their content and reach audiences everywhere,
by providing leading, technology-enabled localisation and media
services.
Founded in 2001, ZOO Digital operates from hubs in Los Angeles,
London, Dubai, Turkey, South Korea, India, Denmark and Spain with a
development and production centre in Sheffield, UK.
The Group provides media services through its platforms that
include: ZOOsubs, ZOOdubs and 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, mastering, 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 Paramount Global.
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 placed to
capitalise on new market opportunities in a fast-paced and
constantly evolving industry.
www.zoodigital.com
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END
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