ZOO Digital Group Plc (AIM:ZOO) shares surged 19% to 11.58p after the media-localisation group posted interim results showing its restructuring efforts are beginning to pay off, with the business generating cash and margins improving despite lower revenue.
Sales fell 19% to $22.4 million as the prior year had been boosted by post-strike backlogs, but gross profit held steady at $10.1 million thanks to deep cost cuts and growth in higher-margin media services.
Gross margin rose sharply to 45%, while adjusted EBITDA increased 18% to $2 million. Cash EBITDA turned positive at $0.6 million, reflecting a leaner cost base and tighter cash control.
Operating losses narrowed to $1.2 million and cash on hand improved to $3.3 million. Management said cost-saving measures are fully embedded, bringing fixed costs down to $15.5 million from $23.2 million two years earlier.
Operationally, ZOO highlighted its new premium Fast Track service, offering dubbing within 24 hours and subtitling in as little as three hours, as well as wider adoption of AI across workflows with customer sign-off. International teams have also been fully integrated, including expanding operations in India.
The company said trading strengthened through the half, with Q2 ahead of Q1 on all key metrics, and it remains on course to meet full-year expectations. Management expects further progress through FY26 and a return to revenue growth in financial 2027.
Chief executive Stuart Green said ZOO had “started to turn the corner” after industry disruption, and is now on a “more solid footing” with improving profitability and growing demand for its tech-led localisation services.