Digital distribution and subtitling services provider ZOO Digital Group PLC (LON:ZOO) anticipates its full-year results to be "significantly" ahead of the past two years, in line with expectations, and plans a discounted placing to help strength its working capital position.
In a trading update, the AIM-listed group said revenues in the year to March 31 will be at least US$16mln, while reported underlying earnings (EBITDA) are expected to be US$1.8mln.
However, ZOO added, while its cash flow has continued to improve month-on-month, its overall working capital position has continued to constrain the volume of new business that it can take on.
As a result, it said it is in discussions with potential new investors and existing shareholders with respect to a placing of new shares in order to raise between £1.0mln and £2.0mln, at a discount to its current share price.
Strength balance sheet …
The group said the placing proceeds would be used to strengthen its balance sheet, allow it to capitalise on the progress made in the past year and to take advantage of new market opportunities, including its dubbing service.
ZOO said it also intends to announce an extension in the term of its convertible unsecured loan stock.
Dr Stuart Green, Zoo Digital’s chief executive officer, said: "ZOO has made good progress and trading has been in line with expectations with a second half that has shown much less seasonal variation than in previous years.
“We are making progress in developing existing revenue channels and remain confident that the Group is well positioned for continued strong growth."
In early afternoon trading, ZOO Digital shares were up nearly 2%, or 0.25p at 13.00p.