"At the time of our final results announced in July of this year, we stated that the company had returned to profitability in the second half of the year, and I am pleased to confirm that this has continued through the start of the new financial year,” chairman Roger Jeynes said.
"We continue to view the current year with optimism, although we must remain cautious given the unpredictability of markets in the current economic environment."
ZOO Digital suffered in 2011 as the onrush of new digital formats and the downloading of material online prompted its film company customers to cut back sharply on DVDs. Adapting these was and remains a major revenue generator for the company.
The company has shifted its emphasis towards adapting titles for newer formats such as Blu-ray and iTunes, while introducing new products such as a platform for adopting complex books online and most recently software for editing subtitles and film dubbling, but the DVD market has also steadied.
"Our most dominant market, the filmed entertainment industry, appears to have reached a certain level of stability after a prolonged period of turbulence, which has led to improved levels of throughput to ZOO.
"At the same time, we continue to develop existing and new products to meet our clients' needs and target new sources of income, as can be evidenced through the recent introduction of ZOOsubs, our software as a service subtitling tool,” Jeynes added.
Broker finnCap said ZOO has confirmed it is experiencing improved levels of throughput, continuing the profitable trend re-established in the second half. "We look forward to further positive newsflow and recovery momentum," it said.
Shares rose 6.5p to 20p.