ZOO Digital Group plc, the provider of cloud-based media production software and services to global creative organisations, today announces its financial results for the six months ended 30 September 2014.
* Adjusted EBITDA is stated before exchange differences and share based payments
Stuart Green, CEO of ZOO Digital, commented, “The Board is very pleased with the progress achieved in the period. The positive momentum from the prior year has continued into the first half, resulting in top line revenue growth of over 40%.
“We remain encouraged by the increasing demand we are receiving for our cloud-based solutions, and our ZOOsubs offering in particular is attracting considerable interest. While we continue to monitor closely the changing dynamics within the entertainment industry, the growing base of repeatable revenues combined with a pipeline of new clients and projects, with a balance sheet strengthened after the period end, gives the Board good grounds for optimism in the future prospects of the business.”
The Board is pleased to report a period of solid progress for the Company with results for the six months to 30 September 2014 in line with management expectations. Revenues grew 47% to $6.9m (H1 2013: $4.7m), driven largely by the continued progress from subtitling services delivered using ZOOsubs.
The increasing gross profit contribution from ZOOsubs, which entails the use of subcontract translators as a cost of sales, has led to gross profit margins decreasing to 76% from 89% in the comparative period. Gross profit margins in other parts of the business have, however, remained resilient and, despite ongoing investment to support the rollout of ZOOsubs, including sales, marketing and infrastructure, we report an EBITDA margin similar to the comparative period, with adjusted EBITDA for the period of $0.4m (H1 2013: $0.3m), an increase of 38%.
On 24 November, post period end, the Group announced that it had raised $1.3m (£0.8m) in new working capital support by way of the issue of a new convertible loan note with Herald Investment Trust plc. The key terms are identical to those of the Company’s existing Unsecured Convertible Loan Notes of £1,770,500, including a conversion price of 48 pence per ordinary share. Subsequent to this issue, the combined existing and new loan notes have a principal value of £2,570,500.
The period under review was characterised by the continued diversification of both the Company’s client base and revenue mix. This has been the result of growing demand for the Company’s ZOOsubs offering, ZOO’s proprietary cloud-based subtitling production and management system. As reported at the time of Company’s final results in August 2014, this offering now includes subtitling, captioning and dubbing services, all of which can be efficiently addressed through the technology platform.
Revenue from the ZOOsubs proposition is repeating in nature and the increased work volumes in the period have provided the Company with greater visibility over future revenue and resource requirements. As a result of the strong momentum for ZOOsubs, the Company continues to invest in the service in line with market opportunities, including increased sales and marketing resources.
While the pipeline of new business for ZOOsubs remains strong going into the second half of the year, the Board expects some short term effects following a disruptive restructuring taking place within one of the Company’s major customers. As a result of these changes some of the work orders placed by this particular customer have been delayed, however the Board remains confident that the orders will resume back to normal levels in the New Year.
Demand for ZOOcore, the Group’s cloud-based workflow and collaboration platform, remains robust and continues to contribute to the Group’s recurring revenue base.
Post period end the Company announced that James Livingston, Non-executive Director, stepped down from the Board with effect from 25 November 2014. The Group intends to appoint a replacement independent non-executive director in due course.
The Board is very pleased with the progress achieved in the period under review. The building momentum from the prior year continued into the first half of the year and we are pleased to have grown top line revenues by over 40%. Management focus on the period ahead will be on improving margins and profitability.
We remain encouraged by the increasing interest we are receiving for our Cloud-based solutions, and we believe the propositions we now offer, consisting of differentiated products and services, leave us well placed to continue to grow the business. While restructuring changes within one of the Company’s major customers has caused some work projects to be delayed, the Board is confident that this will resume back to normal levels in due course. As ever, we can be impacted by the dynamics of the entertainment industry but we are confident that our broadening range of services is attractive to our increasingly diversified customer base and, as a result, we remain cautiously optimistic about the Group’s future prospects.
Tuesday, December 9, 2014
ZOO Digital Group plc, the provider of cloud-based media production software and services to global creative organisations, today provides an update for the six month period ended 30 September 2014.
The Board is pleased to report that trading for the period has continued in line with management expectations, driven by the continued improvement in revenue from subtitling services delivered using ZOOsubs, the Group’s proprietary cloud-based subtitle production and management system. As such, in its interim results for the first half, the Company expects to report revenue of not less than $6.8m (H1 2013: $4.7m), being significant growth of more than 40% over the comparative period last year.
This increase in the delivery of subtitling services entails use of subcontract translators with associated cost of sale which, together with the supporting investments made in sales, marketing and infrastructure, is expected will result in EBITDA margin similar to that in the comparative period last year. The Company continues to have in place a working capital facility and this was recently extended in line with the Company’s actual and anticipated revenue growth.
Demand for the Group’s subtitling software and services continues to build with new customers added every month, including some of the largest global buyers of localisation services. Investment continues in ZOOsubs and ZOOcore in line with growing demand in order to capitalise on this market opportunity.
Wednesday, October 22, 2014
ZOO Digital Group plc, the provider of cloud-based media production services and software to global creative organisations, today announces its financial results for the year ended 31 March 2014.
* Adjusted EBITDA and operating loss are stated before share based payments of $0.03m (2013: $0.1m).
Stuart Green, CEO of ZOO Digital, commented, “At the time of our interim results I stated that we had succeeded in creating a more flexible and focused business but that the Board’s primary aim was to build sustainable growth in revenues. I am glad to report that I believe ZOO is well on this path. Billings in the second half were an improvement on the first half, a trend which I am pleased to confirm has continued into the new financial year.
“The Company has succeeded in diversifying both its client base and revenue mix as well as reducing its exposure to the production of physical media. With the ability to deliver across all formats of digital content and increasing customer diversification, the Board believes that we have the right platform for sustainable growth and, as we look forward, are cautiously optimistic about our prospects.”
The year under review has been a transitional one for the Group and I am pleased to report that it has ended with ZOO having a more focused set of differentiated products and services, increased sales and marketing resources, and a greatly diversified customer base. We have made the difficult transition from traditional software licensing and a heavy dependence on one major customer to a business model where a range of different customers use our software and services, and we are pleased at the momentum now building in these continuing revenue streams.
The main focus of the year has been on the development and deployment of ZOOsubs, the Group’s subtitling and captioning services delivered using our proprietary cloud-based production and management systems. ZOOsubs was developed in response to feedback from customers who wished to create and manage localisation services through our technology. Our offering now includes subtitling, captioning and dubbing services – all huge markets which can be efficiently addressed by our technology platforms. It has been particularly pleasing to see the early enthusiasm for these differentiated services translate into live deployments serving five of the six major Hollywood film studios, as well as several tier-two studios and other corporations.
One of the real strengths of ZOOsubs is that it delivers localisation services across all of the formats of digital content delivery, not just in our traditional area of filmed entertainment. These include physical media, broadcast, streaming and download. The Board believes that this will position the Group well for sustainable growth and shelter us from the decline in the production of physical media for filmed entertainment.
Revenues in the second half of the year were stronger than in the first half with a total for the year of $9.6m, which reflects the fact that monthly billings increased through the second half. I am pleased to report that this trend has continued into the new financial year as our ZOOsubs and ZOOcore systems achieve deeper and wider deployments in a number of different markets around the world.
Roger D Jeynes
At the time of the interim results I stated that we had succeeded in creating a more flexible and focused business but that the Board’s primary aim was to build sustainable growth in revenues. I am glad to report that I believe ZOO is well on this path. Revenues for the year were $9.6m, with the second half of the year showing an improvement on the first half, whilst the adjusted EBITDA* loss of $0.4m follows a period of significant investment in our new subtitling and dubbing propositions, particularly ZOOsubs, the Group’s innovative service delivered through our proprietary cloud-based subtitle production and management system.
The Company also concluded the extension of its convertible loan notes of £1.77m by four years to 31 October 2017, with all the other terms of the notes remaining unchanged. This support from our loan note holders enables us to build on the current momentum within the business unhindered, and on behalf of the Board, I would like to thank the loan note holders for their continued support.
This momentum has been created by the Board’s focus on its key strategic goals, including further development and deployment of ZOOsubs and ZOOcore.
Progress with ZOOsubs has continued in line with the Board’s expectations. At the half year stage, three of the six major Hollywood studios were utilising ZOO’s subtitling production and management system and I am pleased to report that this had increased to five, either directly or indirectly, as well as a growing number of second tier film and television makers shortly following the end of the financial year. As well as these new client additions, ZOOsubs has also continued to see increased volumes of throughput from existing clients.
Use of ZOOsubs by our clients is biased more towards recurring outsourced delivery of services which use our software, rather than per-user software licensing. Although this results in lower initial payments from clients, it provides much greater visibility and sustainability of the Company’s revenues. The Board is pleased to report that the revenue run rate from ZOOsubs services clients continues to develop, providing a strong trajectory of future growth and driving further diversification in client mix, a trend which the Board expects to continue in the new financial year.
As well as an essential component of ZOO’s subtitling and captioning services and a defining feature of other production services we provide, ZOOcore, the cloud-based workflow and collaboration system continues to be deployed as a stand-alone project management solution. This technology platform enables customers to track creative processes and projects from start to finish. In the case of our subtitling services, each client is provided with a customised ZOOcore system through which to submit localisation work orders and track them through all stages until completion on a 24/7 basis. Prospects for all parts of this business remain strong and continue to contribute to ZOO’s recurring revenues.
On behalf of the Board I would like to thank all of our staff for their continued contribution and hard work over the past year and also the growing community of language specialists who work closely with us.
The Board’s focus on ZOOsubs and ZOOcore has already succeeded in diversifying the Company’s client base and revenue mix and has placed the Group in a strong position to provide increasing volumes of localisation services across all delivery platforms.
As well as showing increased revenues in the second half of the year over the first half, the Board is pleased to announce that the trend of increasing monthly billings has continued into the new financial year.
Stuart A Green
Friday, August 29, 2014
ZOO Digital Group plc, the provider of cloud-based media production software and services, today announces an update on trading for the financial year ended 31 March 2014.
The Company is pleased to report that results for the year are expected to be slightly ahead of those previously indicated in the trading update on 12 February. The Group expects to report revenue for the year of $9.7 million and a loss at the EBITDA* level of $0.3 million. This follows a period of significant investment in ZOOsubs, the Group’s proprietary cloud-based subtitle production and management system, to ensure the Group remains well positioned to capitalise on this market opportunity and demand.
ZOOsubs continues to gain momentum through new client additions as well as increased volumes from existing clients. Use of ZOOsubs by our clients is biased more towards recurring outsourced delivery of services which use our software, rather than per-user software licensing. Although this results in lower initial payments from clients, it provides much greater visibility and sustainability of the Company’s revenues. The Board is pleased to report that the revenue run rate from ZOOsubs clients continues to develop, providing a strong trajectory of future growth and driving further diversification in client mix, a trend which the Board expects to continue in the new financial year.
Separately, the prospects for the Company’s ZOOcore business remain strong, particularly in regards to cross-selling into ZOOsubs clients, and ZOOcore continues to contribute to ZOO’s recurring revenues.
Stuart Green, Chief Executive Officer of the Company, commented: “We remain very confident in the value proposition and prospects for our ZOOsubs offering and are pleased with the momentum achieved in the early phase of the rollout. We are encouraged by the current ramp up of revenues that provide better visibility and further diversification of the mix for future periods. We expect this trend to continue into the new financial year and view the future with cautious optimism.”
* Adjusted for exchange differences and share based payments
Tuesday, April 29, 2014
ZOO Digital Group plc, the new generation provider of services that works with leading content owners and creative organizations to enable the delivery of media content globally, faster, and for less investment, today provides an update on trading ahead of its financial year end of 31 March 2014.
The major focus of this financial year has been on the development of ZOOsubs, the Group’s proprietary Cloud-based subtitle production and management system and associated services. The Company is pleased that the progress reported in the Company’s interim results has continued into the second half, and in addition to the three major studios reported at the interim stage, ZOOsubs has now been adopted by several Tier-2 studios and large corporations and there is a strong pipeline of future prospects.
ZOO is currently processing significant volumes of ZOOsubs work, demonstrated by the number of client projects in progress at any one time having tripled over the last two months, and expects the volume of work undertaken to grow further during the remainder of this financial year and throughout next year. Revenue from the ZOOsubs proposition is repeating in nature, which provides the Company with greater visibility over future revenue and resource requirements.
Whilst the Company is pleased with this momentum building in ZOOsubs, its revenue profile tends towards delivery of ZOOsubs as an ongoing service rather than as licence sales, and accordingly revenue for the year to 31 March 2014 is now expected to be below the Company’s expectations and in the region of $9.5 million. In acknowledgement of customer enthusiasm and requirements, the Company has also significantly increased its investment into ZOOsubs in order to meet the market opportunity and demand, including the development of a subtitling team with significant expertise in the sector. As a consequence of the above, the Company now expects to report a loss at the EBITDA* level of no more than $0.4 million, and a loss* before tax significantly greater than the previous year.
Separately, the prospects for the Company’s ZOOcore business remain strong and continue to contribute to ZOO’s recurring revenues.
The Group has during the second half of the financial year announced an extension in the term of its convertible loan notes to 31 October 2017 and the renewed ongoing support for its working capital requirements provided by its standby loan facility. In addition, the Company now has a committed invoice financing facility of up to $1 million to support the working capital requirements of the Company.
Stuart Green, chief executive officer of the Company, commented that: “Whilst it is disappointing that ZOOsubs volumes initially took longer than expected to build, we are pleased that this side of our business is now gaining momentum. We have focused our efforts, and our at times constrained resources, on developing specifically this proposition, which provides significant visibility of future revenues and has already diversified our customer base.”
* Adjusted for exchange differences and share based payments
Wednesday, February 12, 2014