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ZOO Digital boosted by growth in streaming services

Last updated: 15:36 26 Jan 2022 GMT, First published: 09:01 26 Jan 2022 GMT

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ZOO Digital (AIM:ZOO) is benefiting from the continuing growth of streaming services and a return to production following pandemic-related delays.

The company, which provides cloud-based localisation and media services to the global entertainment industry, said full year revenues were expected to climb 44% to at least US$57mln, ahead of market expectations.

It said: "With the resumption of new productions, which had been on hold due to the pandemic, together with ongoing migration of catalogue titles to streaming platforms and regional territory launches, ZOO has secured a strong and growing pipeline of orders across all service lines."

With media companies creating exclusive content for their streaming services, ZOO said this was creating significant volumes of original programming that needed to be prepared and localised for distribution in many countries and languages, resulting in a growing market for its services.

The company has been appointed as a primary vendor for the forthcoming European launch of a global streaming video service and expects that this will lead to significant orders commencing in the fourth quarter and delivering meaningful revenues in the next financial year.

The company's shares are up 10.46% to 143.6p.

3.22pm: SRT Marine Systems boosted by start of £40mln contract

SRT Marine Systems PLC (LSE:SRT) has sailed higher after finalising a recent major contract with a national coast guard.

The company, which provides surveillance and monitoring systems for coast guards and fishery authorities, said it had signed the formal contract for the deal, starting the first phase of the project. 

Chief executive Simon Tucker said: " I am very pleased to be announcing the signing and commencement of the first phase of this £40m SRT-MDA System project. Our project delivery team and in-country partner are well prepared and implementation will therefore commence immediately.

"This is an important new customer for SRT and we expect that further contracts will follow as they build up their national maritime surveillance capabilities in the years to come."

SRT is up 4.35% at 48p.

2.34pm: CPP Group (LSE:CPP) climbs after disposing of loss-making Chinese business

CPP Group (LSE:CPP) has moved out of China and its shares have moved higher.

The provider of assistance and insurance products has agreed to sell CPP China to T-Link Holdings for a nominal HK$1 and a working capital cash injection of £0.5mln. The majority shareholder of T-Link is Wilson Chan, the chief executive of CPP China.

CPP China was established to capitalise on the demand for protection and assistance services in the Chinese market. But with only slow progress and continuing losses, the company decided an exit was the best option.

It said the sale of the business to T-Link rather than a closure was both the least costly for CPP Group (LSE:CPP) and the right option for all stakeholders, enabling the group to focus on its core markets while ensuring in China the smooth transition of colleagues and continuity of service to partners and their customers.

CPP Group (LSE:CPP) chief executive Jason Walsh said: "This disposal is in line with CPP Group (LSE:CPP)'s commitment to taking decisive action in withdrawing from markets where it does not believe its prospects are sufficiently strong. It follows the steps we took in 2021 to simplify and focus the group, through the sale of our German card protection business and restructuring our operations in Mexico and Malaysia.

"The progress we have made on these fronts, together with further actions planned for 2022, allows us to reduce our ongoing operating expense base and concentrate on our technology-led strategy in our key markets where we have the scale and capabilities to generate sustainable growth and deliver greater value for all our stakeholders."

CPP Group shares are up 7.39% or 26p at 378p.

12.11pm: Revolution Beauty looking good after strong festive performance

Revolution Beauty Group PLC (AIM:REVB) is looking good.

The group has reported a strong Christmas performance, with revenues up 41% year on year despite many of its markets going into lockdown.

Its online business did well. Revolutionbeauty.com grew sales by 50% year-on-year for December with returning visitors to the website increasing by 23% year-on-year.

Looking forward it will launch its Makeup Revolution brand in Boots on 21 February.

In the US, it will see its products appear in more than 2800 Walgreens' stores in the first quarter of the new financial year, while its haircare product will roll out into 870 Target stores towards the end of this month.

While it recognises the difficult external environment, it said its full year guidance remained unchanged.

Its shares have added 14.67% or 14.2p to 111p.

10.37am: IG Design loses more than half its value after US problems

IG Design Group PLC (LSE:IGR) has ripped up its profit forecasts after its American dream turned into a nightmare and seen its shares slump.

The company, a specialist in greetings cards, crafting, gifts and gift wrapping, said it had been hit by supply chain problems, rising raw material and fulfilment costs and a drop in demand for crafting in the US as lockdowns eased.

So despite revenues rising 12% to US$828mln in the nine months to the end of December, full year earnings are expected to be significantly below market expectations and it will not pay a full year dividend.

This is the second profit warning in four months.

IG said the problems it identified are likely to continue into the next financial year, so it was not able to give any firm guidance for the outlook.

It is also planning a review of its US business to make sure its overall strategy is correct.

Chief executive Paul Fineman said: "To say that I and the whole board are disappointed with our financial performance over [the financial year] to date is a huge understatement.

"Without any end to the supply and cost challenges in sight we cannot simply wait for these external challenges to improve. We have therefore instigated a review of our US operations, analysing our cost base and identifying improvements that can be made quickly. We remain confident in our long term strategy but with the current challenges unlikely to ease in the short term we plan to undertake this review to ensure it remains appropriate. We will update on progress over the next few months."

Meanwhile its shares have dropped 54.31% to 116.5p.

AJ Bell Investment Director Russ Mould said: “Back in October, management had suggested that adjusted operating margins could drop by around two percentage points, rather than rise by more than one percentage point as analysts had been expecting.

"Chief executive Paul Fineman now believes that IG Design will only break even in terms of adjusted operating profit in the 12 months to March 2022, so the return on sales is now expected to be zero, compared to 4.8% in fiscal 2021.

“It also means that adjusted operating profit will drop from $42mln in fiscal 2021 to nil in the year to March 2022. That helps to explain why the shares are down so sharply, although it is less clear why IG Design’s second major profit disappointment is such a big surprise."

9.50am: Forterra boosted by positive trading and £40mln buyback plan

Forterra PLC (LSE:FORT) has built up a good gain after reporting strong trading and starting a share buyback programme.

The bricks and concrete block maker said its full year results would be in line with expectations, despite significant cost increases in a number of areas, notably energy.

These were offset by better than expected sales volumes, with revenues up 27% to around £370mln.

It also put up of key products in late 2021 and this month, with management continuing to review when further increases would be needed.

With year end cash ahead of expectations, it has started a £40mln share buyback.

Chief executive Stephen Harrison said: "The strong customer demand seen through 2021 continued up to the end of the year, with 2022 trading continuing where 2021 ended. Having successfully delivered sizeable price increases across our product ranges we are confident of delivering meaningful growth in 2022. We remain watchful of further inflationary cost pressures, and we will apply further price increases as necessary.

"The continued strength of demand for our products bodes well, with customers already keen to secure supply ahead of the commissioning of our new brick factory at Desford later this year. We expect 2022 will be an important year as we prepare for a step change in output and financial performance from early 2023."

9.01am: Deltex Medical jumps after winning key overseas contract for its monitors

Deltex Medical Group plc (AIM:DEMG) is in demand after it won a key order for its monitors.

The company, whose technology is used in critical care and general surgical procedures, said it had received a US$200,000 order from a distributor in the Americas for its TrueVue monitors.

The two have been working for 18 months to gain approval for the monitors, which measure blood flow velocity in the central circulation in real time.

Initially the distributor purchased five monitors to carry out in-hospital evaluations and these trials proved successful leading to the TrueVue technology being chosen to fulfil an initial government tender in that market.

As a result, Deltex has now received an initial order for monitors to fulfil government-awarded contracts, with installation expected over the next nine months. Further monitor orders are expected later this year once more tenders are awarded.

The order will also result in contracted monthly revenues for the single-use probes, which are used with these devices.

Deltex said COVID-19 had hit its sales in the UK and US, so it had been focusing its efforts on territories where, in collaboration with its network of distributors, it had been able to obtain regular access to operating rooms.

The news has lifted the company's shares by 14.58% to 1.38p.

Elsewhere Sensyne Health PLC (AIM:SENS) has soared 19.67% to 18.25p after it completed a refinancing.

The clinical AI company has raised £11.35mln through loan notes and warrants, with the first tranche of £6.35mln due by the end of the month.

The funds will see the company - which put itself up for sale in November and is in talks with various parties - through the disposal process.

 

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