www.zoodigital.com
ZOO Digital Group provides software and related services that support the authoring, re-purposing and distribution of creative media. ZOO’s products form an integrated suite of web-based and desktop applications for audio/visual content and printed materials, adapting these media for different languages, formats and delivery mechanisms.
ZOO’s services enable quicker and more cost effective processes across a wide range of applications and formats, including packaging, printed materials, DVD, Blu-ray Disc, video on demand, electronic sell-through, broadcast, music and electronic books
UPDATE: ZOO Digital Group increased profits in FY2011, raises new funds
Broker comment
Final results for ZOO Digital Group (LON:ZOO) show that the software firm’s adjusted operating profit for the 12 months to the end of March increased by 64 per cent to US$1.3 million over that for 2010.
Smaller revenues of US$14 million, compared with US$15 million for 2010, reflected a change in the sales mix to higher margin services, said ZOO.
The firm’s pre-tax profit during the year was US$511,000 (2010: US$868,000 loss), and at the year-end its cash balance was US$0.6 million (March 2010: US$1.2 million).
ZOO also announced a fundraising of £1.7 million via a placing of approximately 4.25 million new shares at a price of 40 pence each. In addition, the firm is restructuring its loan notes: £3.54 million of debt was due to mature on 31 October this year, but £1.77 million of this being converted into just over 4.4 million shares while the remaining £1.77 million of loan notes are being extended to 31 October 2013.
ZOO said the net proceeds of the placing will be deployed toward accelerating the adoption of the company’s software in new markets, particularly e-books. The firm’s management is targeting its software at the production of media-rich e-books, including picture books, comics, graphic novels, cookery books, travel guides and encyclopaedias.
ZOO’s software is used by clients to manage a range of processes that are common in the creative media industry. Hollywood movie studios are key clients, currently.
Since the end of its last financial year, ZOO has signed its first significant contract with a leading video game publisher and it recently completed another share placing, for US$2.8 million, in order to help it pursue the e-books market.
“I am pleased to be able to report further progress for the group, against the backdrop of great upheaval in the filmed entertainment industry,” said Stuart Green, ZOO’s chief executive officer. “It is a great credit to ZOO that it came through this period with increased profits, which underlines the strength of our business. New opportunities continue to present themselves and it has become ever more apparent that our solutions are relevant to a wide range of industries outside of our traditional stronghold of Hollywood.”
House broker FinnCap said that full year 2011 had been immediately followed by the "very positive" news of a further significant customer win and the first non-film media contract, both of which illustrated the potential customer diversification and product opportunities ZOO is already experiencing.
The broker said it was keeping its 75 pence per share price target for the share and added: "With further diversification we expect greater visibility of continuing product momentum."
