Final Results

Zoo Digital Group PLC
29 June 2005


Embargoed until 0700 Wednesday 29 June 2005

                             ZOO DIGITAL GROUP PLC
                             ('ZOO' or 'the Group')

             FINAL RESULTS FOR THE 15 MONTH PERIOD TO 31 MARCH 2005

ZOO Digital Group plc, the DVD technology and games publishing company, today
announces its audited results for the 15 month period to 31 March 2005.

Financial Highlights

   • Group turnover increased by 149% to £12.67 million (12 months to 31
     December 2003: £5.09 million)
   • ZOO Digital Publishing achieves maiden profit showing EBITDA of £498,000
   • Group loss before interest, tax, depreciation and amortisation of £1.59
     million (12 months to 31 December 2003: LBITDA £955,000) reflecting
     investment in readying the pioneering DVD-EXTRA software for roll-out
     internationally
   • Net current assets of £3.21 million as at 31st March 2005 (31 December
     2003: £5.77 million)
   • Successful post year-end fundraising of £3.16 million gross

Operational Highlights

   • Strong turnover increase from ZOO Digital Publishing from £5.09 million
     to £12.29 million
   • Games portfolio and publishing pipeline believed to be strongest ever
   • Core DVD-EXTRA patent granted in UK and 59 patents filed world-wide
   • 50 agreements signed by 3rd parties for DVD-EXTRA to develop
     approximately 150 DVD titles
   • Documentation and financial framework agreed with major Hollywood studio
     with expected revenues of around $1 million for the current financial year
     for 'Menu Regionalisation' module
   • Latest version of DVD-EXTRA STUDIO completed and released

Commenting on the results, Ian Stewart, CEO of ZOO said:

'The Group has seen another year of excellent progress, innovative development
and commercial success. Our publishing business has reported a large increase in
sales and achieved a maiden profit while sales in our DVD technology business
have been reported for the first time and are on track to deliver good revenues
on this side of the business in the forthcoming year. I remain confident and
very excited about the prospects for the Group moving forward.'

Enquiries

Ian Stewart
CEO, ZOO Digital Group plc
0114 241 3700

James Chandler/Helen Thomas
Weber Shandwick/Square Mile
020 7067 0700

John Llewellyn-Lloyd
Noble & Company Limited
020 7763 2200



CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT

Introduction

We are pleased to report another period of growth and significant progress for
this fifteen-month financial period with both of our business units,
DVD-technology and entertainment publishing, performing well. It is particularly
satisfying to see momentum building behind the DVD-EXTRA technology through the
number of licence agreements across a wide range of applications, which we
expect to generate good revenues in the new financial year. We are seeking to
become the world leader in production tools for interactive DVDs and the
significant technological and commercial developments this year have brought
that ambition closer than ever.

The support of existing and new shareholders was welcomed in an oversubscribed
fundraising completed in June 2005 which raised £3 million (net of expenses) to
allow for the further development of the business. The funds raised will allow
the Group to accelerate and exploit the DVD-EXTRA technology now that the
software and business model have been proven. It is important to not
over-stretch our resources so we will continue to concentrate on markets and
regions where the highest penetration and growth of our technology can be
achieved.

Financial Review

The Company has for the second consecutive year dramatically increased turnover.
For the fifteen month period to 31 March 2005 turnover was £12.67 million (12
months to 31 December 2003: £5.09 million) primarily reflecting fast growth in
the publishing business. In line with market expectations the loss before
interest, tax, depreciation and amortisation was £1.59 million, which largely
resulted from the running costs of ZOOtech Limited, the establishment of the
commercial team and the continued research and development on DVD-EXTRA.

ZOO Digital Publishing Limited increased its turnover in the financial period to
£12.29 million (12 months to 31 December 2003: £5.09 million) and ZOOtech's
turnover was £452,000 (12 months to 31 December 2003: £nil) following the launch
of DVD-EXTRA STUDIO during the year.

As at 31st March 2005 the Group had net current assets of £3.21 million (31
December 2003: £5.77 million) with a bank overdraft of £729,000. The Group has a
bank overdraft facility of £2.5 million to fund working capital requirements
with Bank of Scotland and is in the final stages of negotiation for a 5-year
term loan of £1 million.

ZOOtech Ltd ('ZOOtech')

ZOOtech focuses on research and development and licensing of DVD-EXTRA, the
Group's original development software capable of creating complex interactive
content for standard DVD players. The division has made excellent progress this
year in developing its core products and more importantly turning these products
into a commercial reality through a number of license deals which the Group
expects to result in good revenues falling into the current financial year.

Following successful completion of the 'Early Adoptor' programme, DVD-EXTRA
STUDIO was launched in April 2004 and a commercial team was established headed
by managing director Cees Zwaard during the year. ZOOtech Inc was established in
the United States with Gordon Doran appointed President and ZOOtech SARL
established in France to exploit the European market.

It has become clear to ZOO that DVD-EXTRA has applications across many market
segments. In the initial phase since the launch of DVD-EXTRA STUDIO we have
focused on entertainment and multimedia, education, corporate and marketing
uses, film and video uses and cost and process improvement in DVD production. It
is especially pleasing to have made significant progress in each segment and to
have established our royalty based pricing model. In total over 50 agreements
have been signed to date mostly on a royalty stream model basis and the
Directors expect DVD-EXTRA to be used to develop approximately 150 DVD titles by
the end of the current financial year. The agreements range from using DVD-EXTRA
for quiz shows, education and reference products, marketing and corporate
products and interactive DVD games to the creation of a variety of content and
bonus material for the film industry, including a number of prominent Hollywood
studios.

We identified some time ago the interest in Hollywood for use of our technology
in providing significant time and cost savings in the DVD production process and
have been working with a number of studios for a number of months on this. A
number of titles have now been produced and market tested using our 'Menu
Regionalisation' module which dramatically reduces the cost and time of
producing popular film titles in numerous language variations. Although this
process has taken longer than originally anticipated, documentation and a
financial framework have now been agreed with one major studio which the
Directors expect will produce turnover of approximately $1 million for the
current financial year. These deals show an increasingly international element
to licence agreements and underline our unique position in the market as a
provider of globally appealing entertainment products.

The latest edition of DVD-EXTRA STUDIO (version 1.6) was released in April 2005
and provides an advanced development tool capable of delivering a
'one-stop-shop' for the creation of interactive DVD content. A developer can now
undertake an entire project using one software application that offers further
cost and time saving benefits. New functionality also means that developers can
create engaging features on DVDs in a manner not seen previously.

'Interactive DVD' as a market and genre has developed over the last twelve
months and has become more established and recognised as a category in its own
right. The market, driven by ZOOtech's technology, now has strong support from
leading publishers such as Universal Video, VCI and Contender Entertainment
Group.

ZOOtech has now filed for 59 patents in 25 patent 'families' in the UK, USA and
under the International Patent Treaty. Significantly, the core patent 'Authoring
of Complex Audiovisual Products' has already been granted in the UK and New
Zealand. Patent protection insurance has been taken out and ZOOtech will
continue to invest in its intellectual property with a patent development
programme having been established.

ZOO Digital Publishing Ltd ('ZDP')

ZDP focuses on the publishing and distribution of interactive entertainment
products across multiple platforms, such as interactive DVD, PS2, Xbox, GBA, PC
and mobile phones. The division has been equally active and has seen a large
increase in turnover this year from £5.09 million in the 12 months to 31
December 2003 to £12.29 million for the financial period to 31 March 2005. ZDP
has significantly moved into profit with earnings before interest, tax,
depreciation and amortisation of £498,000. We believe that ZDP is well
positioned to deliver further growth and improved profitability over the coming
financial year.

Interactive DVD

On Interactive DVD ZDP substantially increased its output with 'Who Wants To Be
A Millionaire?' published in a number of territories, 'Football Quizz: Votre
Defi', 'Manchester United - The Official Interactive DVD' and 'Guinness World
Records' and is scheduled to further increase its output of titles over the
coming year. Interactive DVD Games are clearly gaining mass-market appeal and
Universal Pictures will publish another enhanced version of 'Who Wants To Be A
Millionaire?' in the UK, France and Australia for Christmas 2005 as well as a
number of other titles that include 'Telly Addicts' and 'Interactive
Championship Challenge'.

Agreements have also been signed to publish 'Who Wants To Be A Millionaire?' in
Germany, with T-online and in Russia with Noviy Disk. Negotiations are in final
stages with a film studio to produce a DVD game for release at the same time as
the movie in early 2006 and discussions are already taking place in a number of
territories with regard to product line-up for 2006 and 2007 giving confidence
with regard to the continued growth of the interactive DVD market. ZDP has been
largely responsible for creating this new product category and will continue to
pioneer production of some of the most complex DVD Games in the market. Its
relationships with major publishers including Universal Pictures, VCI, T-Online
and Noviy Disk and its experience in creating interactive DVDs will ensure that
ZDP captures a significant slice of this growing market.



Games Publishing

In games publishing ZDP improved the quality and depth of its portfolio of games
over the financial year and has a strong pipeline of products in place for the
year ahead with around 25 releases scheduled for the second half of the year.
Our distribution base across Europe and Australia has been strengthened and in
April 2005 ZDP secured the rights to publish a portfolio of twenty-two games
from Destination Software Inc over the next two years across a range of
platforms including the recently released Nintendo DS handheld games console and
the more established GameBoy Advance ('GBA') device. These games will start
shipping from June 2005. The Directors believe that ZDP is well positioned to
deliver continued growth in 2005/2006.

The development project for Konami 'Crimelife' is progressing on schedule for
release in September 2005 and we expect the title will be published in Europe
and North America.

People

The quality of our people, their skills and the will to succeed has been crucial
in the growth of both of our businesses. The businesses have grown significantly
from 46 employees in 2003 to a total of 124 as at 31st March 2005. We moved
offices during 2004 to accommodate our growth and now occupy a stand-alone
building in Sheffield city centre with some 13,000 square feet. The Group
generally experiences low staff turnover and a significant proportion of our
employees are incentivised through share options. We will continue to use these
mechanisms to ensure that rewards are linked to the success of the Group and are
introducing an Inland Revenue approved Share Incentive Plan for the benefit of
all staff in July 2005.

ZOOtech won two major awards at the 2004 Sheffield Business Awards sponsored by
Yorkshire Forward. The judges deemed the company as a model of the best of
Sheffield Industry and an award was presented to ZOOtech for innovation in DVD
development and exploitation of opportunities that DVD-EXTRA brings to
non-traditional DVD-Video markets such as education, corporate training,
advertising, gaming and music. ZDP also received an award from the DVD
Association (DVDA) with the French language version of 'Who Wants To Be A
Millionaire?' DVD Game (Qui Veut Gagner Des Millions?) earning the prestigious
DVD Excellence: Navigation Design and Implementation Award. Credit for such
achievements and the progression of the business is due to the effort of every
member of the team and we would like to thank all of them for their effort and
support on behalf of the Directors.

Prospects

The Board remains confident about the prospects for the Group moving forward. We
look forward to an exciting year and continued development of our businesses.
ZOOtech is now earning revenues through recently signed and prospective new
licence agreements and in addition, DVD-EXTRA is becoming an industry standard
around the world against a background of rapid acceptance and increasing
popularity of the Interactive DVD and DVD Games genres. We are actively looking
at expanding into Japan and the Far East via collaboration and will expand our
presence in the US in line with the growth in demand. ZOO Digital Publishing
continues to perform well, has moved into profit and will grow year on year due
to its high quality games portfolio and innovative approach to new and existing
games platforms.

John Barnes, Chairman

Ian Stewart, CEO

ZOO Digital Group plc

Consolidated profit and loss account
For the period ended 31 March 2005

                                  Fifteen months ended 31        Year ended 31
                                               March 2005        December 2003
                                                    £'000                £'000

Turnover                                           12,669                5,093

Cost of sales                                      (7,611)              (4,091)
                                               __________           __________
Gross profit                                        5,058                1,002
Other operating income                                260                  222
Other operating expenses
- other                                            (6,907)              (2,179)
---------------------------------               ---------           ----------
Loss before interest, tax,
depreciation and
amortisation                                       (1,589)                (955)
---------------------------------               ---------           ----------
- depreciation                                       (155)                (112)
- amortisation of goodwill                           (593)                (451)
                                               __________           __________
                                                   (7,655)              (2,742)
                                               __________           __________
Operating loss                                     (2,337)              (1,518)

Investment income                                      57                  (20)
                                               __________           __________
Loss on ordinary activities
before taxation                                    (2,280)              (1,538)
Tax on loss on ordinary activities                     53                   84
                                               __________           __________
Retained loss for the financial year               (2,227)              (1,454)
                                               __________           __________
Loss per share
Basic                                               (0.80p)              (0.75p)
Diluted                                             (0.80p)              (0.75p)
                                               __________           __________



Consolidated balance sheet
31 March 2005

                                                     31 March      31 December
                                                         2005             2003
                                                        £'000            £'000
Fixed assets
Intangible assets                                       3,351            3,343
Tangible assets                                           377              127
                                                   __________       __________
                                                        3,728            3,470
                                                   __________       __________
Current assets
Stock                                                     903              394
Debtors                                                 5,937            3,107
Cash at bank and in hand                                    -            5,451
                                                   __________       __________
                                                        6,840            8,952
Creditors: Amounts falling due within one
year                                                   (3,630)          (3,185)
                                                   __________       __________
Net current assets                                      3,210            5,767
                                                   __________       __________
Total assets less current liabilities                   6,938            9,237
Creditors: Amounts falling due after more than              -                -
one year
                                                   __________       __________
Net assets                                              6,938            9,237
                                                   __________       __________

Capital and reserves
Called-up share capital                                   559              558
Share premium account                                  18,719           18,691
Other reserves                                          8,598            8,598
Profit and loss account                               (20,609)         (18,382)
                                                   __________       __________
Shareholders' funds (all equity)                        7,267            9,465
Interest in own shares                                   (329)            (228)
                                                   __________       __________
                                                        6,938            9,237
                                                   __________       __________



Consolidated Cash Flow Statement
31 March 2005
                                                  Fifteen
                                             months ended      Year ended 31 
                                                 31 March           December 
                                                     2005               2003
                                                    £'000              £'000

Net cash outflow from operating
activities                                        (4,302)             (2,070)
Returns on investments and servicing
of finance                                            57                 (20)
Tax refund                                             -                  84
Capital expenditure and financial
investment                                        (1,107)                (67)
                                              __________          __________
Cash outflow before financing                     (5,352)             (2,073)

Financing                                           (828)              6,218
                                              __________          __________
(Decrease)/increase in cash in the year           (6,180)              4,145
                                              __________          __________

NOTES TO THE ANNOUNCEMENT

Basis of Preparation and Accounting

The financial statements have been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards.

The financial information set out in this announcement does not constitute full
accounts within the meaning of section 240 of the Companies Act 1985.

The balance sheet at 31 March 2005 and the profit and loss account, cash flow
statement and associated notes to the year then ended have been extracted from
the Group's financial statements. These financial statements have not yet been
delivered to the Registrar of Companies.

Annual Accounts and Further Copies

The annual report and accounts will be posted to shareholders as soon as
practicable and further copies will be available, free of charge, for a period
of one month following posting to shareholders from the Company's Nominated
Adviser and Broker, Noble & Company Limited, 76 George Street, Edinburgh, EH2
3BU, Tel: [phone] or from the registered office of the Group at 20
Furnival Street, Sheffield, S1 4QT.




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