The Company’s issued share capital consists of 97,843,933 ordinary shares with a nominal value of 1 penny each (“Ordinary Shares”), each share having equal voting rights.
The Company does not hold any Ordinary Shares in treasury and therefore the total number of Ordinary Shares with voting rights is 97,843,933.
As of 29th September 2023 the Company had been made aware of the following shareholdings amounting to 3% or more of the ordinary share capital of the Company:
Shareholder No. of Ordinary Shares % Issued Share Capital Canaccord Genuity Group Inc. 13,223,616 13.53 Dr. Stuart A. Green* 11,583, 972 11.84 Herald Investment Management Ltd 9,681,978 9.90 Invesco Ltd 6,424,607 6.57 Stonehage Fleming Investment Management Ltd 4,686,739 4.79 Janus Henderson Investors 4,510,000 4.61 Deka Investment 3,494,200 3.57
In accordance with the AIM Rules (Rule 26), in so far as the Company is aware, as of 29th September 2023, the percentage of the Company’s issued share capital that is not in public hands is 25.84%.
*Total shareholding excludes shares held in the ZOO Digital Group Share Incentive Plan (SIP)
The directors who held office at 29th September 2023 have the following beneficial interests, including family interests, in the 1p ordinary shares of ZOO Digital Group plc:
Name of Director No. of Ordinary Shares Gillian Wilmot 194,422 Mickey Kalifa 50,000 Dr. Stuart A. Green 11,583,972 Phillip Blundell 80,000 Gordon Doran 156,033
Total beneficial interest includes shares held in the ZOO Digital Group Share Incentive Plan (SIP).
The Company’s issued share capital consists of 97,843,933 ordinary shares with a nominal value of 1 penny each (“Ordinary Shares”), each share having equal voting rights.
All members of the board believe strongly in the value and importance of good corporate governance and in our accountability to all of ZOO’s stakeholders, including shareholders, staff, clients, our growing network of freelance workers and other suppliers. In the statement below, we explain our approach to governance and how the board and its committees operate.
The corporate governance framework which the group operates, including board leadership and effectiveness, board remuneration, and internal control is based upon practices which the board believes are proportional to the size, risks, complexity and operations of the business and is reflective of the group’s values. Of the two widely recognised formal codes, we decided in 2018 to adhere to the Quoted Company Alliance’s (“QCA”) Corporate Governance Code for Small and Mid-Size Quoted Companies (revised in April 2018 to meet the current requirements of AIM Rule 26).
The QCA Code is constructed around ten broad principles and a set of disclosures. The QCA has stated what it considers to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures. We have considered how we apply each principle to the extent that the board judges these to be appropriate in the circumstances, and below we provide an explanation of the approach taken in relation to each. The board considers that it does not depart from any of the principles of the QCA Code.
Board Composition and Compliance
The QCA Code requires that the boards of AIM companies have an appropriate balance between executive and non-executive directors of which at least two should be independent. I have assumed the role of chair of the Remuneration Committee and member of the Audit Committee. I am assisted by Mickey Kalifa as the group’s second independent non-executive director.
For many years we have supported the QCA Code’s principle to review regularly the effectiveness of the board’s performance as a unit, as well as that of its committees and individual directors. The most recent review was in February 2021. A number of refinements in working practices were identified as a result of this exercise and have since been adopted. We will be considering the use of external facilitators in future board evaluations.
We have made significant efforts to ensure effective engagement with both institutional and private shareholders. In addition to the usual roadshows following the release of full year and interim results, each of which was expanded to include a greater number of existing and potential new investors, we have actively promoted our AGM as a forum to present to and meet with investors, and presented at a virtual investor conference. The company has also continued to distribute a quarterly shareholder newsletter to which investors can subscribe via email, providing an easy to access source of information on operational activities taking place within the group.
The board has continued to commission Progressive Equity Research to produce and provide both institutional and private investors with independent research on the group.
The board has ultimate responsibility for reviewing and approving the Annual Report and Accounts and it has considered and endorsed the arrangements for their preparation, under the guidance of its Audit Committee. The Directors confirm the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the group’s position and performance, business model and strategy.
The following paragraphs set out ZOO’s compliance with the 10 principles of the QCA Code.
Establish a strategy and business model which promote long-term value for shareholders
The purpose of the group is encapsulated in the expression of its mission, which is to make life easier for the people who entertain the world. Our business model is to provide media localisation and media services to content owners and distributors. Our strategy is to deliver these through a combination of proprietary software technology that acts as a competitive differentiator, and a large global network of linguistic professionals engaged on a freelance basis. We believe this will deliver a profitable and highly valued business and competitive advantages over other providers of similar services, leading to faster turn-around of projects, to a consistently high quality at an attractive price point.
The key challenges we face include:
- Maintaining consistently high levels of quality – very high standards are now expected by the digital distributors who influence much of the localisation that is commissioned by industry players. We have implemented automated testing wherever possible, and our system-driven workflow management ensures that manual linguistic quality control is engaged as necessary. In the case of dubbing operations, we have developed software to analyse the acoustic performance of recording environments to ensure they meet minimum specifications.
- Ensuring security of client assets – the safekeeping of materials is of paramount importance. Our production facilities in Sheffield, London and Los Angeles are audited for security annually by the Trusted Partner Network. Features to prevent the copying of assets and provide effective deterrents are implemented throughout our proprietary software and systems. During the period we enhanced features within our software that provide a high level of deterrent for copyright theft.
- Delivering continuous availability – a failure in the group’s systems could lead to an inability to deliver services. This is addressed by operating redundant systems across multiple availability zones, a comprehensive disaster recovery programme and assigning staff from both UK and US facilities on each project. During the period the group moved all of its staff to working from home arrangements while delivering uninterrupted service and maintaining the same high standards of quality and security.
- Operating a large freelancer network – the group’s capacity for processing orders is dependent, in part, on the network of freelance workers. The cloud software is enhanced on an ongoing basis to make the group’s systems increasingly attractive to freelance workers. Financial processes are designed to ensure that all freelancers are paid on time. A process of peer review is implemented in the group’s production systems to ensure that all work undertaken by freelancers is independently checked and verified and its quality is assured.
- Recruiting and retaining suitable staff – the group’s ability to execute its strategy is dependent on the skills and abilities of its staff. We undertake ongoing initiatives to foster good staff engagement and ensure that remuneration packages are competitive in the market. We are adopting hybrid working as a permanent practice across the group following successful operations through the lockdown periods of the past year.
We believe we have the right strategy and service in place to deliver strong growth in sales over the medium to long term. We expect the gross profit of our localisation segment to improve in future periods as our dubbing service and software mature, which will result in improving EBITDA margins or provide us with scope for additional investment in new services. This will enable us to deliver sustainable shareholder value.
Seek to understand and meet shareholder needs and expectations
Responsibility for investor relations rests with the CEO, supported by the CFO. During the period under review the following activities were pursued to develop a good understanding of the needs and expectations of all constituents of the group’s shareholder base:
Key: GW: Gillian Wilmot; SG: Stuart Green; PB: Phillip Blundell; GD: Gordon Doran; MK: Mickey Kalifa;
Date Description Participants Comments Apr 20 Presentations to institutional investors SG, PB Discussion relating to a trading update May 20 Broking firms sales and team meetings SG, PB Provide an update May 20 Investor newsletter Newsletter distributed to subscribers July 20 Preliminary results roadshow and media meetings SG, PB Institutional investors, analysts and PCB’s via Zoom calls July 20 Retail investor presentation SG, PB Open invitation to retail investors; presentation with Q&A; recording made and published on website and via PI World July 20 Investor calls GW Follow-up calls with institutional investors Aug 20 Investor newsletter Newsletter distributed to subscribers Sept 20 AGM GW,SG, PB, GD, MK Actively encouraged all investors to attend event held via webinar; event recorded and made available on website Sept 20 Capital Markets Day SG, PB, GD Presented event as a webinar including guest speakers; event recorded and made available on website Oct 20 LSE/Stifel New York Virtual Investor Conference SG, PB Participated in an investor conference, including panel discussion and one-on-one investor meetings Nov 20 Interim results roadshow and media meetings SG, PB Institutional investor meetings held by Zoom Nov 20 Retail investor presentation SG, PB Open invitation to retail investors; presentation with Q&A; recording made and published on website and via PI World Nov 20 Investor newsletter Newsletter distributed to subscribers Dec 20 Ad hoc investor meetings SG, PB Update meetings with institutional investors Jan 21 Ad hoc investor meetings SG, PB Update meetings with institutional investors Feb 21 Ad hoc investor meetings SG, PB Update meetings with institutional investors Feb 21 Investor newsletter Newsletter distributed to subscribers Mar 21 Analyst meetings SG, PB Introductory meetings Mar 21 Share placing meetings SG, PB Presentations to institutional investors and PCBs relating to a share placing Mar 21 Video briefing for retail investors SG Produced video explanation of share placing and distributed to investor mailing list subscribers
The group is committed to communicating openly with its shareholders to ensure that its strategy and performance are clearly understood. We communicate with shareholders through the Annual Report and Accounts, full-year and half-year announcements, trading updates and the annual general meeting (AGM), and we encourage shareholders’ participation in virtual meetings. A range of corporate information (including all ZOO announcements) is also available to shareholders, investors and the public on our website.
Private shareholders: The AGM is the principal forum for dialogue with private shareholders, and we encourage all shareholders to attend and participate through RNS announcements and a quarterly newsletter. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. The chairs of the board and all committees, together with all other directors whenever possible, attend the AGM and are available to answer questions raised by shareholders. Shareholders vote on each resolution, by way of a poll. For each resolution we announce the number of votes received for, against and withheld and subsequently publish them on our website.
Institutional shareholders: The directors actively seek to build a mutual understanding of objectives with institutional shareholders. Our CEO and CFO make presentations to institutional shareholders and analysts immediately following the release of the full-year and half-year results. We communicate with institutional investors frequently through a combination of formal meetings, participation at investor conferences, roadshows and informal briefings with management. The majority of meetings with shareholders and potential investors are arranged by the broking team within the group’s Nominated Advisor. Following meetings, the broker provides anonymised feedback to the board from all fund managers met, from which sentiments, expectations and intentions may be gleaned.
In addition, we review analysts’ notes to achieve a wide understanding of investors’ views. This information is considered by the board and has contributed to the preparation of the group’s Investor Relations strategy which was revised and approved in May 2020.
Take into account wider stakeholder and social responsibilities and their implications for long-term success
Stakeholder Reason for engagement How we engage Staff – our ability to fulfil client services and develop and enhance the cloud software platforms on which they depend relies on having talented and motivated staff Good two-way communication with staff is a key requirement for high levels of engagement, fostering a culture of innovation Monthly staff briefings delivered in the UK and US in person and by webcast.
Invitation to staff to ask questions of management that are answered in the briefings.
Annual engagement survey.
These have provided insights that have led to enhancement of management practices and staff incentives.
Extension of Sharesave scheme.
Clients – our success and competitive advantage are dependent upon fulfilling client requirements, particularly in relation to quality of service, its speed of delivery and security Understanding current and emerging requirements of clients enables us to develop new and enhanced services, together with software to support the fulfilment of those services Seek feedback on services and software systems.
Obtain fulfilment metrics employed by clients to measure performance.
Obtain requests for new services and service enhancements.
These have led to the group securing approved vendor status with a number of large media organisations.
Suppliers – a key supplier group is our network of freelancers who fulfil linguistic services Freelance workers will provide similar services to other organisations, including our competitors, so we must ensure they are available to us and accommodating We optimise our systems to simplify the work of freelancers as much as possible, including in relation to administration of projects.
We operate systems to ensure that supplier invoices are processed and paid promptly.
These have led to a large, growing and supportive freelancer network.
Shareholders – as a public company we must provide transparent, easy-to-understand and balanced information to ensure support and confidence Meeting regulatory requirements and understanding shareholder sentiments on the business, its prospects and performance of management Regulatory news releases.
Keeping the investor relations section of the website up-to-date.
Quarterly investor newsletters.
Participation at investor events.
Publishing of videos of investor presentations and interviews.
Annual and half-year reports and presentations.
We believe we successfully engage with our shareholders; over the past 12 months this engagement has led to support for the group and good liquidity in trading.
Industry bodies – the services we provide must meet certain requirements The views of certain industry groups, including the Motion Picture Association of America (MPAA) and the Trusted Partner Network (TPN) are influential in the way the group is perceived by certain clients Membership of MPAA, MESA and TPN and participation in security programs.
Annual audit of security.
These have resulted in audit reports that have led to certain clients commencing engagement.
Communities – what we do impacts communities in the places where we operate and elsewhere It is important to be, and to be perceived as a reputable business that makes a positive contribution to local economies and is attractive as an employer and partner Multiple activities to support fundraising of local charities and good causes.
Participation in apprenticeship and other schemes to support and provide opportunities to young people.
One director is a trustee of a registered charity.
These have led to a favourable profile for the group in the local areas of its major operations.
Corporate social responsibility
The Company strives to ensure that its business activities positively benefit all stakeholders by committing to conduct its business in a fair and responsible manner, to treat its employees fairly, supporting personal growth and development, and to have a positive impact in its local community.
We strongly value our customers and seeks to deliver a world-class product backed by class-leading customer service and support. The Company routinely seeks customer feedback and performance appraisal inputs and takes active steps to remedy any instances of customer dissatisfaction.
Key customers are also routinely invited to provide product improvement inputs, and in some cases to test key features or functionality prior to general release.
The Company has agreed rate cards with its major customers to provide a fair and transparent pricing structure so that customers can be confident that the Company’s services are cost effective.
The Company is an Equal Opportunity Employer and its policy is to ensure that all employees and job applicants will be given equal opportunities in all aspects of employment and training irrespective of their gender, ethnic origin, disability, age, marital status, sexual orientation or religious affiliation (and/or any other protected characteristics under relevant legislation). ZOO encourages, where possible, the employment of disabled people and the retention of those who become disabled during their employment with the Group.
The Company recognises the benefit of involving employees in target setting and keeping employees informed of progress. As a result of the COVID-19 pandemic, the Group wide meetings (via video conferencing) became much more frequent in FY2021. The Board felt this was necessary in order to keep employees up to date on progress and to keep employees closely connected with each other and the business. Due to the size of the Company, regular consultations with senior management take place. The views of employees are considered when making decisions which are likely to affect their interests. This has included the introduction of increased ability for employees to put questions to senior management members during Group wide meetings and has also included the introduction of various digital surveys issued to employees throughout FY21 so that they can give their views and feedback on relevant Group wide matters. ZOO ensures that it communicates clear and appropriate policies to employees setting out data protection rules, information security rules, commercial contract rules (e.g. sales contracts, procurement contracts and partner contracts), commercial dispute resolution rules, share dealing rules, anti-bribery rules, anti-bullying/harassment rules and anti-discrimination rules and codes of conduct. These policies and procedures are made available to employees via the Group’s Human Resources Information System and are regularly reviewed and updated as necessary. The Board regularly reviews, considers and updates the salaries, benefits and support offered to the Group’s employees. The aim of this is to ensure that individuals with the appropriate experience and skill to add value to the business and drive its long-term success are attracted to the Group and then retained. In addition, this approach by the Board aims to ensure that staff are provided with the appropriate environment, career progression and rewards to remain motivated and enabled to produce the best possible output and add the maximum possible value to the Group.
The Company participates in various charitable activities in the communities in which it operates. The Company has made a number of small direct financial contributions to charities and Company employees have participated in a number of local charity events during the year. Looking forward to FY22, the Company will be encouraging employees to actively take two additional paid leave days each and donate them for the support of charitable projects in the community. The Company will be extending its involvement with charities that are associated with our industry that are either technology or language based and progress will be included in next year’s report.
Towards the end of 2020, the Board approved and initiated a project for the Group to become carbon neutral and designated a member of staff responsible for leading this long-term project to a successful conclusion. This project commenced on the 2 June 2021 and will involve an in-depth review, analysis and evaluation of the carbon emissions of the Company, followed by the implementation of appropriate changes in policies, procedures and systems to enable the Company to strive towards its aim of obtaining and maintaining a carbon neutral status. The cloud computing solutions employed for deployment of the Group’s software platforms provides an energy and infrastructure efficient approach. In addition, the Group’s novel approach to fulfilling dubbing services through its cloud software enable projects to be performed remotely and in a distributed way, thereby significantly reducing the requirement of voice actors, dubbing directors and others to travel, and minimising the Group’s need to own and operate extensive dubbing facilities across many locations. The Group’s current approach to the business/work related travel activities of its staff remains the main area targeted by this project, along with the way in which such activities are recorded and reported. This project and its continuation throughout FY22 will demonstrate the Board’s awareness of and regard for the Company’s impact on the environment and the Board’s intention to ensure that the Company reduces, as much as is reasonably possible, any negative impact of the Company’s operations upon the environment.
Embed effective risk management, considering both opportunities and threats, throughout the organisation
The CFO has prepared a risk register for the group that identifies key risks in the areas of corporate strategy, financial, clients, staff, environmental and the investment community. All members of the board are provided with a copy of the register. The register is reviewed periodically and is updated as and when necessary.
Within the scope of the annual audit, specific financial risks are evaluated in detail, including in relation to foreign currency, interest rates, liquidity and credit.
Staff are reminded on a monthly basis to report, anonymously or otherwise, any security risks or threat they perceive in the operations of the business. On receipt of any such notification, a security incident team is mobilised to assess and take remedial action as appropriate in the circumstance.
Staff are reminded on a monthly basis that they should seek approval from the CFO if they, or their families, plan to trade in the group’s equities.
Maintain the board as a well-functioning, balanced team led by the chair
The members of the board have a collective responsibility and legal obligation to promote the interests of the group and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.
The board consists of five directors of which three are executive and two are independent non-executives. The board is supported by two committees: audit and remuneration. The board does not consider that it is of a size at present to require a separate nominations committee, and all members of the board are involved in the appointment of new directors. The board intends to appoint additional non-executive directors as its business expands.
Non-executive directors are required to attend 10-12 board and board Committee meetings per year and to be available at other times as required for video and telephone meetings with the executive team and investors.
Meetings held during the period under review and the attendance of directors is summarised below:
Board meetings Audit Committee Remuneration Committee Possible Attended Possible Attended Possible Attended Executive Directors Dr. Stuart Green 12 12 – – 2 2 Gordon Doran 12 12 – – – – Phillip Blundell 12 12 2 2 – – Non-executive Directors Gillian Wilmot 12 12 2 2 2 2 Mickey Kalifa 12 12 2 2 2 2
The board has a schedule of regular business, financial and operational matters, and each board Committee has compiled a schedule of work to ensure that all areas for which the board has responsibility are addressed and reviewed during the course of the year. The Chairman is responsible for ensuring that, to inform decision-making, directors receive accurate, sufficient and timely information. The Company Secretary compiles the board and Committee papers which are circulated to directors prior to meetings. The Company Secretary provides minutes of each meeting and every director is aware of the right to have any concerns recorded in the minutes and to seek independent advice at the group’s expense where appropriate.
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
All five members of the board bring relevant sector experience in media and technology, all have at least nine years of public markets experience and two members are chartered accountants. The board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy. Directors attend seminars and other regulatory and trade events to ensure that their knowledge remains current.
Gillian Wilmot, Independent Chairman
Term of office: Appointed as Chairman with effect from 1 July 2019; Chair of the Remuneration Committee and a member of the Audit Committee.
Background and suitability for the role: Along with extensive board level leadership roles in both private and public company environments, Gillian brings a wealth of relevant industry experience across B2B, technology, advertising and communication sectors. Gillian’s skillset shows particular strengths in value creation, operational insight and corporate governance, for which she was recognised in the 2014 UK NED awards. Therefore, she brings strong experience of governance, public markets and growth companies.
Current external appointments: Non-Executive Chairman of Peasy.com, Non-Executive Chairman of Brighter Beauty Group, Non-Executive Chairman of Bubbles Online Services Ltd., Director of NED Advisory Ltd., Director of Board Mentoring Ltd, Director of Sport Mentoring Ltd, Member of Industrial Development Advisory Board for UK Government.
Time commitment: two to three days per month.
Mickey Kalifa, Independent Non-Executive Director
Term of office: Joined as Non-Executive Director on 5 October 2017; Chair of the Audit Committee and member of the Remuneration Committee.
Background and suitability for the role: Mickey is a Chartered Accountant and finance professional with nearly 30 years’ experience across the technology, media and gaming sectors. Mickey was appointed CFO of M&C Saatchi plc in March 2019, a LSE listed business. Previously he was CEO of the betPawa Group and CFO of Sportech plc. where he led a transformation in the company’s financial strength and played a prominent role in driving Sportech’s global expansion. He brings a combination of financial expertise, knowledge of public markets as well as a wide range of sector experience gained from a career spent in the technology, media and gaming sectors with some of the world’s largest media and technology companies, including Liberty Global, BSkyB PLC, Time Warner, Disney and Young and Rubicam.
Current external appointments: CFO of M&C Saatchi plc.
Time commitment: one to two days per month.
Dr. Stuart Green, CEO
Term of office: A co-founder from the group’s inception in 2001, originally in the role CTO, and appointed CEO on 1 February 2006.
Background and suitability for the role: Stuart brings over 30 years of experience of team building and executive management in the software industry to his role as CEO. Stuart established ZOO’s business strategy and difference in the marketplace by using software technology to deliver disruptive innovation. With a PhD in Computer Science he brings expertise in software technology, a track record of innovation having secured over 30 software patents, experience of leading innovative technology businesses as a result of having co-founded and sold three private software companies, and experience of capital markets gained from 21 years as a main board director of AIM-quoted companies.
Current external appointments: Trustee of the registered charity Friends of the Rowan School and Trustee of the Sheffield Chamber Orchestra.
Time commitment: full-time.
Phillip Blundell, CFO
Term of office: Appointed as Chief Financial Officer in July 2018.
Background and suitability for the role: Phill has extensive experience with AIM listed businesses having worked as an Executive Director for Dot Digital Group plc, Eagle Eye Solutions Group plc and Intelligent Environments Group plc. During the 21 years working for AIM listed businesses, he has floated one business and raised substantial funds to assist the growth strategies of the businesses. A qualified Chartered Accountant since 1987 with 31 years’ experience in the software and media industries, Phill brings both financial expertise and sector experience. He has 23 years as a CFO and Company secretary of AIM listed businesses providing strong Corporate Governance experience.
Current external appointments: Flamefinch Partners.
Time commitment: full-time.
Gordon Doran, Chief Commercial Officer
Term of office: Originally engaged as a commercial consultant in 2005 to establish the group’s US operations and was appointed Commercial Director on 28 July 2009.
Background and suitability for the role: Gordon has spent his career in commercial roles with technology businesses in the UK and USA. As Chief Commercial Officer and President of ZOO’s US operation, Gordon is responsible for all global operations and has been pivotal in establishing relationships with a number of large US entertainment companies including the ‘big six’ Hollywood studios. Based on the West Coast of the USA, Gordon brings significant experience of sales and marketing in the software industry since the early 1990s, having held senior positions in a number of companies, including as COO for Mediostream Inc., and capital markets experience as a main board director for 10 years.
Current external appointments: None.
Time commitment: full-time.
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
A board evaluation process led by the Chairman took place February 2021. All directors began by completing questionnaires about the effectiveness of the board and a self-assessment of their own contributions which were returned to the Chairman. The Chairman then reviewed this information and used it as the basis for an individual discussion with each director, followed by a collective discussion with the board.
The review considers effectiveness in a number of areas including general supervision and oversight, business risks and trends, succession and related matters, communications, ethics and compliance, corporate governance and individual contribution.
A number of refinements in working practices were identified as a result of this exercise and have since been adopted.
We will be considering the use of external facilitators in future board evaluations.
As the business expands, the executive directors will be challenged to identify potential internal candidates who could potentially occupy board positions and set out development plans for these individuals.
Promote a corporate culture that is based on ethical values and behaviours
Our long-term growth is underpinned by our core values which reflect our core brand proposition to make globalising media content smarter, easier and better:
- Think Smarter
- Inspiration everywhere: We’re always open to learning. From our colleagues, from our customers, even from our suppliers. When we work together and share ideas, we share success.
- There is no box: When you look at things differently, you’ll find new and creative ways to take on any challenge.
- Make it easier
- We are family: Everyone is heard, everyone is valued. We challenge each other, but it’s done with love and respect.
- Be the customer: We put ourselves in our customers’ shoes to anticipate their future needs and blow their minds.
- Be better
- Daydream believers: Think big and be bold. See a way to change something for the better and then believe you can make it happen. Remember… disruption favours the brave!
- There’s always a way: Never underestimate the power of determination. From dreaming up new tech to just good old-fashioned graft. We’ll get the job done.
The culture of the group is characterised by these values which are conveyed regularly to staff through internal communications, in monthly staff briefings and forums. A staff recognition programme operates on an on-going basis by which any employee can nominate any of his/her colleagues for a contribution that is in-keeping with the core values. All nominees are recognised at company-wide staff briefings that in FY21 took place by webinar, presented by executive directors and senior managers. The core values are communicated to prospective employees in the group’s recruitment programmes and are considered as part of the selection process.
The board believes that a culture that is based on it’s core values is a competitive advantage and consistent with fulfilment of the group’s mission and execution of its strategy.
The culture is monitored through the use of a widely used satisfaction and engagement survey that is operated on an annual basis and to which all permanent staff are invited to contribute. The board reviews the findings of the survey and determines whether any action is required.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Board provides strategic leadership for the group and operates within the scope of a robust corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the group implements in its business plans. The board defines a series of matters reserved for its decision and has approved terms of reference for its Audit and Remuneration Committees to which certain responsibilities are delegated. The chair of each committee reports to the board on the activities of that committee.
The Audit Committee monitors the integrity of financial statements, oversees risk management and control, monitors the effectiveness of the internal audit function and reviews external auditor independence.
The Remuneration Committee sets and reviews the compensation of executive directors including the setting of targets and performance frameworks for cash- and share-based awards.
The Executive Board, consisting of the Executive Directors and the US-based Chief Operations Officer, operates as a management committee, chaired by the CEO, which reviews operational matters and performance of the business, and is responsible for significant management decisions while delegating other operational matters to individual managers within the business.
The Chairman has overall responsibility for corporate governance and in promoting high standards throughout the group. She leads and chairs the board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual directors, the board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the group and its shareholders.
The CEO provides coherent leadership and management of the group, leads the development of objectives, strategies and performance standards as agreed by the board, monitors, reviews and manages key risks and strategies with the board, ensures that the assets of the group are maintained and safeguarded, leads on investor relations activities to ensure communications and the group’s standing with shareholders and financial institutions is maintained, and ensures that the board is aware of the views and opinions of employees on relevant matters.
The Executive Directors are responsible for implementing and delivering the strategy and operational decisions agreed by the board, making operational and financial decisions required in the day-to-day operation of the group, providing executive leadership to managers, championing the group’s core values and promoting talent management.
The Independent Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the Executive Directors and ensure that the group is operating within the governance and risk framework approved by the board.
The Company Secretary is responsible for providing clear and timely information flow to the board and its committees and supports the board on matters of corporate governance and risk.
The matters reserved for the board are:
- Setting long-term objectives and commercial strategy;
- Approving annual operating and capital expenditure budgets;
- Changing the share capital or corporate structure of the group;
- Approving half year and full year results and reports;
- Approving dividend policy and the declaration of dividends;
- Approving major investments, disposals, capital projects or contracts;
- Approving resolutions to be put to general meetings of shareholders and the associated documents or circulars; and
- Approving changes to the board structure.
The board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this Code on an annual basis and revise its governance framework as appropriate as the group evolves.
Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
In addition to the investor relations activities described above, the following Audit and Remuneration committee reports are provided.
Audit Committee Report
During the year, the Audit Committee has continued to focus on the effectiveness of the controls throughout the group. The Audit Committee consists of Mickey Kalifa, chair, and Gillian Wilmot. The committee met twice, and the external auditor and CFO were invited to attend these meetings. Consideration was given to the auditor’s pre- and post-audit reports and these provide opportunities to review the accounting policies, internal control and the financial information contained in both the annual and interim reports. The Committee also met with the auditors with no executives present.
Directors’ Remuneration Policy
This section sets out the Directors’ Remuneration Policy. The Remuneration Committee considers the Remuneration Policy annually to ensure that it continues to underpin the Group’s strategy.
The main aim of the Group’s policy is to align the interests of Executive Directors with the Group’s growth strategy and long-term creation of shareholder value. The policy is designed to remunerate the Executive Directors competitively and appropriately and allow them to share in this success and the value delivered to shareholders. The policy is based on the following principles:
- Promote shareholder value creation and support the business growth strategy.
- Ensure that the interests of the Directors are aligned with the long-term interests of shareholders.
- Deliver a competitive level of pay for the Directors sufficient to attract, retain and motivate individuals; and
- Ensure that an appropriate proportion of the package is determined by targets linked to the Group’s performance.
- Ensure the total reward cost to ZOO are affordable and sustainable.
Component Purpose and link to strategy Operation Maximum Performance measure Base salary To provide a competitive base salary to attract, motivate and retain directors with the experience and capabilities to achieve the strategic aims. Reviewed annually against salary surveys for market rate, Group performance, role and experience. No overall maximum, however, they are reviewed to ensure they are proportionate and fair when compared to other salaries in the Group.
Benefits To provide a market competitive benefits package Receive benefits in line with market practise, these include death in service plus health care in the US.
Set a level deemed appropriate by the Remuneration committee
Pension To provide an appropriate level of retirement benefit Executive Directors are eligible to participate in the Group’s pension scheme. Up to 5% of base salary
Annual bonus To reward performance against annual targets which support the strategic plan. Awards are made annually and are paid in cash Maximum of 100% of base salary Minimum of 80% based on financial performance and a maximum of 20% linked to smart personal objectives. L-T incentives Awards are linked to long-term financial and strategic objectives. To further promote equity ownership and long-term
performance, vesting occurs at the end of a three-year period
with holding periods applying up to a further seven years.
Awards are made at market price at date of grant and with performance targets that require to be met in the first 3 years after grant. No maximum, subject to not exceeding the Group’s overall share based incentive schemes limit that apply across all employees of 15% of issued share capital. Performance metrics will be linked to financial performance. Shareholdings To promote share ownership for Executive Directors Executive Directors are encouraged to build a shareholding in the Group over time. No maximum N/A
Explanation of performance measures
Performance measures are selected that are aligned with the performance of the Group and the interests of shareholders. Stretching targets are set each year for the annual bonus and long-term incentive awards. When setting these performance targets, the Committee will consider several different reference points, which may include the Group’s business plan and strategy and the economic environment.
The Committee retains the ability to adjust or set different performance measures if events occur which cause the Committee to determine that the measures are no longer appropriate, and that amendment is required so that they can achieve their original purpose. Awards and options may be adjusted in the event of a variation of share capital in accordance with the rules of the share option scheme.
Non-Executive Directors Remuneration Policy
The Remuneration Policy for the Non-Executive Directors is to pay fees necessary to attract an individual of the talent required, taking into consideration the size of the business and the time commitment of the role. This is reviewed annually by the Group Chairman and the Chief Executive. The basis of the fees is cash only and Non-Executive Directors do not receive any other benefits other than reasonable travel and other expenses incurred in the course of performing their duties.
The Company welcomes dialogue with its shareholders over matters of remuneration. The Chairman of the Remuneration Committee is available for contact with institutional investors concerning the approach to remuneration.
Date Director Transaction No. of Shares Price (p) Total Share- holding* % Holding 27 Oct 2023 Gillian Wilmot Buy 83,200 36.0 194,422 0.2 27 Oct 2023 Gillian Wilmot Buy 79,705 37.8 111,222 0.1 28 Sep 2023 Stuart Green Buy 125,000 40.0 11,583,972 11.84 11 July 2022 Stuart Green Exercise of share options 150,000 15.0 11,458,972 12.92 11 July 2022 Gordon Doran Exercise of share options 150,000 15.0 156,033 0.18 11 Apr 2022 Phillip Blundell Buy 5,000 118.0 80,000 0.01 7 Dec 2021 Stuart Green Sale 1,500,000 123.0 11,308,972 12.9 22 Sep 2021 Stuart Green Conversion of loan stock 1,280,208 48.0 12,808,972 14.62 11 Nov 2020 Phillip Blundell Buy 25,000 52.9 75,000 0.01 31 July 2019 G Wilmot Buy 30,000 74.0 30,000 0.04 18 July 2019 N Foster (Spouse of G Wilmot) Buy 1,517 65.55 1,517 0.002 23 April 2019 P Blundell Buy 25,000 44.2 50,000 0.07 22 March 2019 Stuart Green Transfer from family estate 4,762 0 11,528,764 15.49 23 January 2019 P Blundell Buy 25,000 65.0 25,000 0.03 5 July 2018 HP Gilder Transfer from SIP 11,868 0.0 67,887 0.09 5 July 2018 HP Gilder Sale 409,349 115.0 56,019 0.08 5 July 2018 HP Gilder Exercise of Options 49,349 15.25 465,368 0.63 5 July 2018 HP Gilder Exercise of Options 360,000 15.0 416,019 0.56 7 March 2018 HP Gilder Sell 40,000 73.26 56,019 0.08 7 March 2018 HP Gilder Exercise of options 40,000 15.0 96,019 0.13 5 Oct 2017 MM Kalifa Buy 50,000 39.0 50,000 0.07 4 May 2017 Dr. SA Green Buy 6,666,667 9.0 11,524,002 15.68 4 May 2017 RD Jeynes Buy 222,222 9.0 342,222 0.47 9 Jan 2012 JA Livingston Buy 4,240 11.0 4,240 0.01 5 Jan 2012 RD Jeynes Buy 100,000 9.3 120,000 0.37 6 Sep 2011 Dr. SA Green Buy 250,000 40 4,857,335 14.9 6 Sep 2011 Dr. SA Green Conversion 427,500 40 4,607,335 6 Dec 2010 IC Stewart Buy 30,000 15 1,705,365 7.17 26 Nov 2010 HP Gilder Buy 9,176 58 56,019 0.24 5 Jul 2010 RD Jeynes Buy 20,000 40.5 20,000 0.08 15 Jul 2009 HP Gilder Buy 46,450 0 46,843 0.22 6 Oct 2008 Dr. SA Green Buy 1,333,333 15 4,179,835 19.6 11 Apr 2008 Dr. SA Green Buy 100,000 17 2,846,502 15.89 24 Aug 2007 Dr. SA Green Buy 2,540,000 25 2,746,502 15.33 24 Aug 2007 IC Stewart Buy 800,000 25 1,675,365 9.35 23 Oct 2006 75:1 share consolidation 27 Sep 2006 Dr. SA Green Buy 5,846,154 0.65 15,487,654 3.49 27 Sep 2006 IC Stewart Buy 4,615,385 0.65 65,152,540 14.69 16 Feb 2006 IC Stewart Buy 500,000 3.75 60,537,155 19.07 1 Feb 2006 IC Stewart Buy 714,000 3.5 60,037,155 18.92 9 Jun 2004 Dr. CHB Honeyborne Buy 100,000 11.0 100,000 0.04 12 Dec 2003 IC Stewart Buy 7,142,857 10.5 59,323,155 21.26 18 Aug 2003 IC Stewart Buy 1,000,000 3.0 52,180,298 23.96 16 Sep 2002 IC Stewart Buy 1,004,260 3.0 51,180,298 32.44
* Total shareholding excludes shares held in the ZOO Digital Group Share Incentive Plan (SIP). ZOO is subject to the UK City Code on Takeovers & Mergers.
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