Trading Statement

RNS Number : 7519W

Zoo Digital Group PLC

31 January 2013

 



31 January 2013

ZOO DIGITAL GROUP PLC

("ZOO" or "the Company")

Trading Update

ZOO Digital Group plc, the provider of workflow management software and services for creative media production, today provides an update on current trading.

In the announcement of its interim results on 21 November 2012, the Company stated that it had seen strong growth in Blu-ray production during the six months to 30 September 2012.  Unfortunately, ZOO has subsequently seen a contraction in the production services pipeline. This is predominantly due to the postponement by a large client of certain projects (including orders for the production of a significant number of DVD and Blu-ray titles) which were expected in the second half of the financial year.

Progress has been made in diversifying ZOO's revenue streams and ZOO continues to increase its focus on licensing of workflow management and productivity software.  However, in the current year of trading, production services have contributed the majority of the Group's revenue.

Consequently, the Company is expecting revenues for the year ending 31 March 2013 to be in the region of $10.6-$11.0 million and has implemented certain cost cutting measures accordingly, including headcount reductions, to align its cost base with its revenue pipeline. Notwithstanding this, ZOO currently expects that EBITDA* will be in the region of $0.6-$0.8 million and expects a loss before tax* of between $1.1 and $1.3 million.

Whilst remaining confident in the working capital resources available to it, the Company has entered into a standby loan arrangement with Sara Green, the wife of Dr. Stuart Green, CEO of the Company, for up to £200,000 (the "Loan") to provide headroom, if required, for seasonal dips in the Company's working capital requirements. The Loan will attract interest of 5.5 per cent above the base rate set by the Royal Bank of Scotland from time to time and is repayable by ZOO no later than 31 March 2014. The Loan will be secured upon the assets of the Company. No fees are payable to Dr Green or his wife in respect of the Loan, but the Company will recompense Dr Green for any reasonable costs incurred by him in the provision of the Loan.

As Dr. Green is a director of the Company, the Loan constitutes a related party transaction pursuant to the AIM Rules for Companies. The Company's directors (other than Dr. Green), having consulted with the Company's nominated adviser, finnCap Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

*As adjusted for share-based payments and foreign exchange rate differences.

Ends

For further enquiries please contact:

ZOO Digital Group plc	0114 241 3700
Stuart Green - Chief Executive Officer
Helen Gilder - Group Finance Director
FinnCap	020 7220 0500
Marc Young / Henrik Persson
Newgate Threadneedle	020 7653 9850
Josh Royston / Terry Garrett / Hilary Millar

About ZOO Digital Group plc:

ZOO Digital Group plc provides software and related services that support the authoring, re-purposing and distribution of creative media. ZOO's products form an integrated suite of cloud-based and desktop applications for audio/visual content and printed materials, adapting these media for different languages, formats and delivery mechanisms.

By centralising editorial and approval processes via secure cloud-based platforms, ZOO's proprietary patented software helps customers to increase their speed of production, reduce costs and protect their brand integrity. ZOO's services enable quicker and more cost effective processes across a wide range of applications and formats, including packaging, printed materials, DVD, Blu-ray Disc, video on demand, electronic sell-through, broadcast, music and electronic books.

The Group's largest customers include major Hollywood studios, for which the production, marketing and distribution of titles in numerous formats across many geographies and languages has previously been a lengthy, costly and largely manual process. Increasingly the Group's software is benefiting a variety of companies across sectors where the development of media products, printing, packaging and marketing involves complex processes in multiple countries and languages, particularly where brand integrity is of core importance.

 

END

 

 

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