Source - LSE Regulatory
RNS Number : 8636R
Zoo Digital Group PLC
10 November 2021
 

10 November 2021

 

ZOO DIGITAL GROUP PLC

("ZOO" the "Group" or the "Company")

 

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 

Structural tailwinds and proprietary end-to-end services drive strong sales growth

 

ZOO Digital Group plc (LON: ZOO), a world-leading provider of cloud-based localisation and digital media services to the global entertainment industry, today announces its unaudited financial results for the six months ended 30 September 2021 ("H1 FY22").

 

HIGHLIGHTS

 

Key Financials

·    Revenues increased by 64% to $26.9 million (H1 FY21: $16.4 million) driven by strong growth in the period for subtitling and media services

·    Gross profit increased by 68% to $8.6 million (H1 FY21: $5.1 million)

·    Adjusted EBITDA1 up 82% to $2.4 million (H1 FY21: $1.3 million) reflecting the strong revenue growth and operational gearing

·    Operating profit of $0.4 million (H1 FY21: loss of $0.1 million)

·    Cash balance of $8.2 million at period end (H1 FY21: $2.1 million) benefitting from the $10.3 million placing in April 2021 to fund accelerated growth

·    Conversion of the 7.5% unsecured convertible loan stock into 5,273,959 new shares, removing the main borrowings of the Group and the associated interest payments

 

Operational Highlights

·    Extended ZOOstudio platform further and secured a new customer deployment

·    Media services grew by 142% due to a high volume of work in preparing catalogue titles for release on streaming platforms

·    Localisation grew 30% as new productions resumed in Q2

·    Freelancer network grew to 9,752 (H1 FY21: 8,272, +18%)

·    Established mastering team, launched new service and secured first customer

·    Launched global growth initiative with investment to establish ZOO Turkey

·    Signed lease to rent new property in Sheffield to support long-term innovation and growth

 

Outlook

·    Strong order book across all service lines with good visibility for H2 and a pipeline of work from established, satisfied customers

·    New mastering initiative and international expansion provide two additional revenue streams

·    The Board expects that the developments in its services will yield greater diversity in revenue categories in the period ahead

·    The Board will continue to invest in expanding capacity to support an increase in market share in H2 and into FY23, which is expected to generate increased profitability in future periods

 

1adjusted for share-based payments

 

 

Stuart Green, CEO of ZOO Digital, commented: 

 

"Structural tailwinds and our end-to-end services powered by our proprietary systems have fuelled very strong revenue growth while back catalogue work surged as streaming globalises. More recently new production work returned and reached pre-pandemic levels in August.

 

"We are building on our international capability through partnering and investing in regions of the world where the strongest growth is anticipated. The launch of ZOO Turkey has already strengthened our MENA operations and discussions are underway in further territories to ensure that we are best placed to enhance our offer and grow market share.

 

"This is our time. We are but one of a handful of players that can meet client needs through our market leading approach. We are confident of strong growth for the foreseeable future. We are currently building increased capacity to accelerate sales and making great strides toward our medium term target of $100 million."

 

 

For further enquiries, please contact:

 

ZOO Digital Group plc

+44 (0) 114 241 3700

Stuart Green - Chief Executive Officer

 

Phillip Blundell - Chief Finance Officer

 

 

 

Stifel Nicolaus Europe Limited

Fred Walsh / Tom Marsh

+44 (0) 20 7710 7600

 

 

Instinctif Partners

Matthew Smallwood / Joe Quinlan

+44 (0) 20 7457 2020

 

 

 

The Company further wishes to draw attention to the posting on its website (www.zoodigital.com) of a presentation to shareholders regarding its interim results, and of an investor presentation (www.zoodigital.com/interims2022) that will be live streamed on Wednesday 10th November at 5:00pm GMT.

 

 

About ZOO Digital Group plc:

 

ZOO Digital supports major Hollywood studios and streaming services to globalise their content and reach audiences everywhere, by providing world-leading, technology-enabled localisation and media services.

 

Founded in 2001, ZOO Digital operates from hubs in Los Angeles, London and Dubai, with a development and production centre in Sheffield, UK. The company is targeting $100m sales in the medium term.

 

The Group provides media services through its platforms that include: ZOOsubs, ZOOdubs, ZOOstudio. Its full-service proposition delivers the end-to-end services required to prepare both original and catalogue content for digital distribution; these services include dubbing, subtitling & captioning, metadata creation & localisation, artwork localisation and media processing. Alongside this offering, ZOO also provides its customers with management platforms and strategic solutions to support their own internal globalisation operations.

 

ZOO is a go-to service partner for media businesses looking to globalise their content across different territories, languages and distribution platforms. Using its innovative technology-enabled approach, ZOO helps its customers to reduce time to market, lower costs and deliver high quality products to their global audiences. The business has frameworks in place with all major Hollywood studios and streaming services. Its customers include Disney, NBCUniversal, HBO and ViacomCBS.

 

ZOO's competitive advantage arises from three interlinking factors - the leading role it has played in the digital transformation of its sector; the world class proprietary platforms that it develops to enable this transformation; and the global supply chain of thousands of freelancers, working collaboratively in ZOO's platforms, which delivers services that scale easily to meet demand. These factors combine to make ZOO uniquely geared to capitalise on new market opportunities in a fast-paced and constantly evolving industry.

 

 

CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT

 

Overview

 

During the first half of the Company's FY22, production companies across the global entertainment industry resumed work on creating new TV series and feature films that will drive growth in H2 and beyond. In August, it was reported that new projects were back to pre-pandemic levels and that TV production continues to surge. This, combined with the on-going migration of catalogue content to streaming platforms and the launch of those platforms in new territories has driven very strong sales growth in H1 of 64% over the prior year period, a trend that we expect to continue, and excellent results overall.

 

The Over-the-Top (OTT: film and television content platforms provided via high-speed internet connections instead of cable or satellite provider-based platforms) market was worth around $122 billion in 2019 and is forecast to reach $1 trillion by 2027 (source: Allied Market Research). By 2021 82% of US consumers had at least one streaming subscription, with four subscriptions being the average (source: Deloitte). Indications are that the upsurge in subscriptions over the past 18 months will be sustained, with 86% of subscribers planning on maintaining or adding to their subscriptions (source: Brightback).

 

Whilst almost all households in the US already have at least one OTT subscription, it is from several other regions that we see opportunities for rapid growth.

 

Of the hundreds of distinct OTT providers, an increasing number have set out their intentions to distribute services on a global or multinational basis. Platforms that have access to premium content with global appeal are looking at international markets to support their accelerated growth. This, in turn, is a driver of demand for the services provided by ZOO.

 

Key growth regions are: Eastern Europe from 2022 following launches from Disney+, Sky Showtime and HBO Max; Asia Pacific is anticipated to nearly double by 2026; India  to triple over the same period; and the MENA region anticiped to grow by 74% (source: Digital TV Research). For OTT providers, maximising revenue opportunities will require more content to be localised into a greater number of the languages spoken in these regions than has ever been the case previously.

 

The recent success of the Korean Netflix Original series Squid Game has also highlighted the significant trend for global distribution of non-English TV content. Since its release it has been the most popular Netflix show in over 90 countries. Netflix has been investing in non-English programming since 2015 and has spent more than $1 billion on Korean content alone.

 

Once post-production has been completed for a new title, localisation and media services must be performed before the title can go live on a streaming platform. In the past the procurement of this range of services was frequently divided amongst several different vendors, each typically specialising in a subset of the services. Due to the pace and volume with which content is being made available for OTT streaming, buyers are increasingly turning to End-to-End (E2E) vendors, of which ZOO is one of a very few globally capable in fulfilling all service lines. ZOO has benefited in H1 from this trend and the Board expects this to continue throughout H2 and beyond.

 

The centralisation of procurement of these services by the large US buyers is beneficial to ZOO since it enlarges the addressable market for our services, as purchasing decisions that were previously devolved geographically are increasingly made through the groups with which ZOO has long-established relationships and strong customer satisfaction.

 

With a proposition that has been purpose designed to address the current and emerging needs of large media organisations, ZOO is well placed to ride the secular growth of an industry that is expanding in multiple dimensions simultaneously - in content, in OTT service offerings and in language requirements. The strong growth delivered in H1 is the result not only of an expanding market, but in ZOO's ability to adapt to change and increase its market share from traditional vendors in the sector.

 

Given the significant commercial opportunities ahead, the Board has committed investment in several areas to continue to capture and expand market share . Cashflow generated from operations, together with the proceeds of the share placing that completed on 31 March 2021, are being put to work to drive accelerated profitable growth that will deliver significant return.

 

The Company has announced a global growth initiative to support the needs of major content creators and streaming services by extending its international footprint through investments in the key content sourcing and distribution locations of Turkey, Korea, Thailand, India, Japan, and Malaysia. The availability of resources in these locations will enable ZOO to accelerate the growth of its talent pool and thereby to align closely with the current and future objectives of its customers.

 

Continuing its leadership of the digital transformation of the sector, the Company has been expanding the resources in its R&D team, adding software engineers, quality assurance engineers, project and product managers, and others to provide greater capacity and accelerate the pace at which new innovations can be delivered to customers and partners. In addition, a further collaborative R&D project has begun recently in which AI research in speech technologies will be developed to provide competitive advantages in the future.

 

ZOOstudio, the Company's secure platform that provides a centralised system to manage localisation and media service operations, has been the subject of significant further enhancement during the period, enabling ZOO to embed this strategic capability more broadly and deeply within customer operations. The Company is currently in the process of configuring and integrating a ZOOstudio implementation for a further multinational media organisation.

 

The area of greatest expansion in headcount terms has been across our various production teams that deliver premium services to our customers. Here we have added more project managers, coordinators, and other roles to enlarge the Company's throughput of projects where demand is growing in all areas. This includes established teams for subtitling, dubbing, audio description, artwork, metadata, and a range of media services, and now also extends to the area of content mastering following the establishing of a new division post period.

 

Investments in capital equipment have been made, not only to provide the resources necessary to fulfil the new mastering service, but also to support a higher throughput of digital media processing across all service lines at facilities in Los Angeles, London, Sheffield, and Dubai.

 

We are grateful to the holders of the Company's convertible unsecured loan stock who agreed to convert their loans into ordinary shares in the capital of ZOO in September, in advance of the redemption date of 31 October 2021. The benefit of this is that the Statement of Financial Position as of 30 September 2021 is free of significant debt, simplifying the capital structure of the Company. The Board would like to extend its thanks to the holders of the loan notes, most of whom have provided continuous support to the Company since the origins of the convertible instruments in 2006.

 

The board remains committed to building a responsible, future-focused business. During the period, ZOO commissioned an ESG Health Check with a leading provider and is in the process of implementing new initiatives particularly in the areas of education, diversity and inclusion, technological innovation and the environment. The Company is launching its ZOOgooders programme which permits all staff to dedicate a proportion of their working time to the support of charities and other good causes.

 

Operations

 

ZOO's competitive advantage and differentiation stems from the breadth and depth of its E2E proposition delivered through the Company's proprietary technology. Accordingly, the Board has continued to strengthen its E2E offer through the launch of two recent important initiatives.

 

Firstly, the launch of mastering services creates an additional revenue stream and provides an important adjacent capability that has been requested by existing customers under the scope of E2E engagements. The procurement of capital infrastructure to support this service and the recruitment and training of a new team reflects a significant investment in H1 with revenues to follow in H2 now assured through a first engagement with a leading media organisation. This provides good visibility throughout the second half, not only for the incremental mastering assignments but also for the wider scope of work that is bundled with such E2E projects in the areas of localisation and media services.

 

Secondly, the Company  announced post period its global growth strategy and the first of a series of investments in regional partners. To align with the current and future objectives of ZOO's customers in fast-growing territories, the Company is in various levels of discussions regarding investments to expand its geographic footprint in key content sourcing and distribution locations, namely Turkey, Korea, Thailand, India, Japan and Malaysia. The geographic expansion will further strengthen the Company's offering with simplified access to new territories, helping clients to overcome the challenges of localising and fulfilling large volumes of original and catalogue content, as well as supporting the increasing need to prepare locally acquired TV shows and movies for streaming services around the world. The new hubs are also expected to support the business development team by providing wider international coverage and access to new markets.

 

A first investment in long-time affiliated partner and Istanbul based ARES Media has led to establishing ZOO Turkey, extending the Company's reach across the MENA region. With its high production values, Turkish content continues to be strategically important to ZOO's customers which have been acquiring this content for distribution on global streaming services. Several further investments, each situated in a location that is of strategic significance to the industry's growth ambitions, are in the pipeline and will be announced in due course.

 

People

 

ZOO's strategy of creating innovative cloud software platforms with their attendant benefits of efficiency, scalability and security is perfectly adapted to a post-pandemic world in which remote and hybrid working have become the new norm. ZOO's asset-light approach affords the Company the flexibility and agility needed to maintain productivity over the long term, delivering clear differentiation in the market for a proposition that is increasingly valued and sought after.

 

We have continued to expand our servicing resources to accommodate an ever-greater volume of business. This expansion maintains our trajectory to reach sales of $100m in the medium term.

 

The strength of the Company lies in its people, their talents and commitment, which includes our colleagues, our in-territory advocates who have been instrumental in connecting us with resources and customers in their markets, our expanding pool of gifted freelancers who now number close to 10,000, and our partners, several of which we expect to become part of ZOO Digital Group in the coming months. Delivering consistent growth at our current pace while maintaining outstanding performance targets with all our clients is no mean feat. We extend our heartfelt thanks to all members of the ZOO family for their support, dedication, and resilience at this exciting time in the development of the Company.

 

Outlook

 

The industry's gross cash amount spent producing and licensing new entertainment content (excluding sports) soared by 16.4% in 2020 to an all-time high of $220 billion, with 2021 spend expected to rise to more than $250 billion (source: Purely Streamonomics). The tailwinds caused by this explosion in new content, coupled with the accelerated migration of catalogue content to streaming platforms and the associated new territory launches, are providing an environment in which the Board expects to deliver sustained, profitable growth over the long term.

 

The Company has a strong order book across all service lines with good visibility for H2 and a pipeline of work from established, satisfied customers extending into the future. The new mastering service and the customer orders already received present an exciting opportunity to secure larger and longer-term assignments. The Board expects that the developments in the services offered by ZOO will yield greater diversity in revenue categories in the period ahead.

 

The Board is committed to sustainable growth of the business which requires on-going expansion of resources to support enlarged capacity. This is being achieved through increases in headcount, expansion of the freelance talent pool and investment in partners. These initiatives will support an increase in market share in H2 and into FY23 and enable greater levels of profitability in the periods ahead when the investments can be fully leveraged, propelling the Company towards its medium-term target of $100 million in sales.

 

The Board is confident in delivering continuing profitable growth and in achieving its vision to be our customers' most trusted partner to help them deliver engaging, entertaining, and immersive content experiences to their global audiences.

 

 

FINANCIAL REVIEW

 

Revenues of $26.9 million were 64% ahead of the same period last year (H1 FY21: $16.4 million). This is as a result of a 142% increase in Media Services, driven by ZOO's support for two major OTT geographic launches in the period. Localisation revenues, which include subtitling and dubbing services, increased by 30% as our customers resumed some new productions post the worst of the global pandemic.

 

Gross profit increased from $5.1 million to $8.6 million in the half year from 1 April 2021, reflecting the revenue growth and direct staff costs falling by two percent. In real terms direct staff grew by 53% as we continue to build the business to support higher volumes of orders.

 

Operating expenses increased to $8.3 million (H1 FY21: $5.3 million) which in percentage terms is an increase of 57%, in line with our strategy outlined at the time of the placing to invest in our geographic presence and in Research and Development. We have recruited eight territory managers to source both new talent and new customers and we have increased our R&D spend by 42% in the half year period compared to the same period last year.

 

Adjusted EBITDA increased by 82% to $2.4 million compared to $1.3 million last year as a direct result of the revenue increase offsetting the investment in people and R&D. This is reflected in the operating profit improvement of $0.5 million, despite increases in the depreciation charge due to higher capital expenditure and property costs.

 

The statutory loss for the period was $1.7 million, which is $0.9 million more than last year (H1 FY21: loss of $0.7 million), primarily due to the final accounting charge related to the conversion of the 7.5% unsecured convertible loan stock which was completed in September 2021, being a non-cash fair value movement on the loan stock of $1.0 million.

 

The cash balance on 30 September 2021 was $8.2 million (H1 FY21: $2.1 million) reflecting the net cash flow from financing of $8.2 million, primarily due to the April fundraise. Net cash flow from operating activities was negatively impacted by the delay in the payment of debtors resulting in an out flow of $0.9 million. Net cash flow from investing activities was a negative $2.1 million following the investment in both R&D and capital equipment to support the growth of the business.

 

The Group has short-term lease commitments on capital equipment of $1.0 million (H1 FY21: $1.4 million), a reduction of $0.4 million as no new lease commitments were entered into during the period. The balance in short-term borrowings relates to rent due on leasehold properties. The higher commitment compared to last year is due to a new office lease in Sheffield which is for a 10 year period covering 19,000 square feet. This also explains the increase in the property asset and the corresponding increase in long-term liabilities as required by IFRS 16 of $2.0 million.

 

The conversion into equity of the 7.5% unsecured convertible loan stock on 22 September 2021 reduced company borrowings by $9.5 million. The transaction involved creating 5,273,959 new shares at a price of 48p to satisfy the repayment of the loan stock.

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

 

 

for the six months ended 30 September 2021

 

Unaudited

6 months to

30 Sep 2021

$000

Unaudited

6 months to

30 Sep 2020

$000

Audited

Year ended

31 Mar 2021

$000

 

Revenue

26,927

16,393

39,525

 

Cost of sales

(18,357)

(11,277)

(25,882)

 

Gross Profit

8,570

5,116

13,643

 

Other operating income

 135

110

188

 

Operating expenses

(8,332)

(5,306)

(12,869)

 

Operating profit/(loss)

373

(80)

962

 

Analysed as

 

 

 

 

EBITDA before share-based payments

2,355

1,291

4,534

 

Share based payments

(124)

(57)

(649)

 

Depreciation

(1,097)

(705)

(1,702)

 

Amortisation

(761)

(609)

(1,221)

 

 

373

(80)

962

 

 

 

 

 

 

Exchange loss on borrowings

(5)

(284)

(359)

 

Costs re raise of capital

(596)

-

-

 

Fair value movement on embedded derivative

(971)

-

(3,474)

 

Other finance cost

(317)

(346)

(700)

 

Total finance cost

(1,889)

(630)

(4,533)

 

Loss before taxation

(1,516)

(710)

(3,571)

 

Tax on loss

(152)

(15)

408

 

Loss and total comprehensive income for the period attributable to equity holders of the parent

(1,668)

(725)

(3,163)

 

Profit per ordinary share

 

 

 

 

- basic

 (2.02) cents

 (0.97) cents

 (4.24) cents

 

- diluted

 (2.02) cents

 (0.97) cents

 (4.24) cents

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

As at 30 September 2021

 

 

 

Unaudited as at 30 Sep 2021

$000

Unaudited as at 30 Sep 2020

$000

Audited as at 31 Mar 2021

$000

 

 

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

6,935

4,650

4,362

 

 

Intangible assets

6,876

6,693

6,812

 

 

Deferred tax assets

486

486

 

 

 

14,297

11,660

 

 

Current assets

 

 

 

 

 

Trade and other receivables

12,440

7,313

8,063

 

 

Contract assets

2,194

1,867

2,178

 

 

Cash and cash equivalents

8,214

2,949

 

 

 

22,848

13,190

 

 

Total assets

37,145

24,850

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

(11,216)

(9,311)

(9,955)

 

 

Contract liabilities

(558)

(736)

(813)

 

 

Borrowings

(1,771)

(1,598)

(5,032)

 

 

Separable embedded derivative

-

(4,452)

 

 

 

(13,545)

(20,252)

 

 

Non-current liabilities

 

 

 

 

 

Borrowings

(3,093)

(5,810)

(1,759)

 

 

Separable embedded derivative

-

-

 

 

Total liabilities

(16,638)

(22,011)

 

 

Net assets

20,507

2,839

 

 

EQUITY

 

 

 

 

 

Equity attributable to equity holders of the parent

 

 

 

 

 

Called up share capital

1,166

1,011

1,010

 

 

Share premium reserve

51,191

41,022

41,003

 

 

Other reserves

12,320

12,320

12,320

 

 

Share option reserve

2,209

1,432

2,085

 

 

Capital redemption reserve

6,753

 6,753

 6,753

 

 

Convertible loan note reserve

8,914

42

42

 

 

Foreign exchange translation reserve

(992)

(992)

(997)

 

 

Accumulated losses

(60,999)

(59,331)

 

 

 

20,562

4,695

2,885

 

 

Interest in own shares

(55)

(46)

(46)

 

 

Attributable to equity holders

20,507

4,649

2,839

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for the six months ended 30 September 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ordinary shares

Share premium reserve

Foreign exchange translation reserve

Convertible loan note reserve

Share option reserve

Capital redemption reserve

Other reserves

Accumu-lated losses

Interest in own shares

Total

 

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

Balance at

 

 

 

 

 

 

 

 

 

 

1 April 2020

1,010

41,003

(992)

42

1,375

 6,753

12,320

(56,168)

(46)

5,297

Issue of share capital

1

19

-

-

-

-

-

-

-

20

Share-based payments

 -

 -

 -

57

 -

 -

57

Transactions with owners

 1

 19

 -

 -

57

 -

 -

 -

 -

77

Loss for the period

 -

 -

 -

(725)

(725)

Total comprehensive income for the period

 -

 -

 -

 -

 -

 -

 -

(725)

 -

(725)

Balance at

 

 

 

 

 

 

 

 

 

 

30 September 2020

1,011

41,022

(992)

42

1,432

6,753

12,320

(56,893)

(46)

4,649

Share options exercised

-

-

-

-

61

-

-

-

-

61

Share-based payments

-

-

-

-

592

-

-

-

-

592

Foreign exchange translation

-

-

(5)

-

-

-

-

-

-

(5)

Issue of share capital

(1)

(19)

-

-

-

-

-

-

-

(20)

Transactions with owners

(1)

(19)

 (5)

 -

653

 -

 -

 -

 -

628

Loss for the period

 -

(2,438)

(2,438)

Total comprehensive income for the period

 -

 -

 -

 -

 -

 -

 -

(2,438)

 -

(2,438)

Balance at

 

 

 

 

 

 

 

 

 

 

31 March 2021

1,010

41,003

(997)

42

2,085

 6,753

12,320

(59,331)

(46)

2,839

Share based payments

-

-

124

124

Foreign exchange translation

-

-

5

-

-

-

-

-

(9)

(4)

Issue of share capital

156

10,188

-

8,872

-

-

-

-

-

19,216

Transactions with owners

156

10,188

 5

 8,872

124

-

 -

 -

 (9)

19,336

Loss for the period

 -

(1,668)

(1,668)

Total comprehensive income for the period

 -

 -

 -

 -

 -

 -

 -

(1,668)

 -

(1,668)

Balance at

 

 

 

 

 

 

 

 

 

 

30 September 2021

1,166

51,191

(992)

8,914

2,209

6,753

12,320

(60,999)

(55)

20,507

                               

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

for the six months ended 30 September 2021

 

30 Sep 2021

30 Sep 2020

31 Mar 2021

 

 

Unaudited
6 months to
30 Sep 2021

$000

Unaudited

6 months to

30 Sep 2020

$000

Audited

Year ended

31 Mar 2021

$000

 

Cash flows from operating activities

 

 

 

 

Operating profit/(loss) for the period

373

(80)

962

 

Depreciation

1,097

705

1,715

 

Amortisation

761

609

1,221

 

Share based payments

124

57

649

 

Changes in working capital:

 

 

 

 

(Increases)/decreases in trade and other receivables

(4,377)

143

(918)

 

Increases/(decreases) in trade and other payables

1,261

1,998

2,719

 

Cash flow from operations

(761)

3,432

6,348

 

Tax (paid)/received

(152)

(15)

408

 

Net cash flow from operating activities

(913)

3,417

6,756

 

Investing Activities

 

 

 

 

Purchase of intangible assets

(17)

(41)

(67)

 

Capitalised development costs

(808)

(569)

(1,274)

 

Purchase of property, plant and equipment

(1,285)

(1,588)

(2,290)

 

Net cash flow from investing activities

(2,110)

(2,198)

(3,631)

 

Cash flows from financing activities

 

 

 

 

Repayment of borrowings

(283)

(540)

(982)

 

Proceeds from borrowings

-

1,042

 1,043

 

Proceeds from fund raise

10,107

-

-

 

Repayment of principal under lease liabilities

(503)

(543)

(1,102)

 

Finance cost

(593)

(343)

(414)

 

Share options exercised

-

-

61

 

Share issue costs

(596)

19

-

 

Issue of Share Capital

156

 1

 -

 

Net cash flow from financing

8,288

(364)

(1,394)

 

Net Increase in cash and cash equivalents

5,265

855

1,731

 

Cash and cash equivalents at the beginning of the period

2,949

1,218

1,218

 

Cash and cash equivalents at the end of the period

8,214

2,073

2,949

 

 

 

 

NOTES

General information

 

ZOO Digital Group plc ('the Company') and its subsidiaries (together 'the Group') provide productivity tools and services for digital content authoring, video post-production and localisation for entertainment and packaging markets and continue with on-going research and development in those areas. The Group has operations in both the UK and US.

 

The Company is a public limited company which is listed on the Alternative Investment Market and is incorporated and domiciled in the UK. The address of the registered office is 7th Floor, City Gate, 8 St Mary's Gate, Sheffield. The registered number of the Company is 3858881.

 

This condensed consolidated financial information is presented in US dollars, the currency of the primary economic environment in which the Company operates.

 

The interim accounts were approved by the board of directors on 9 November 2021.

 

This consolidated interim financial information has not been audited.

 

Basis of preparation

 

The consolidated financial statements of ZOO Digital Group plc and its subsidiary undertakings for the period ended 31 March 2022 will be prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

 

This Interim Report has been prepared in accordance with UK AIM listing rules which require it to be presented and prepared in a form consistent with that which will be adopted in the annual accounts having regard to the accounting standards applicable to such accounts. It has not been prepared in accordance with IAS 34 "Interim Financial Reporting".

 

The policies applied are consistent with those set out in the annual report for the year ended 31 March 2021, and have been consistently applied, unless stated otherwise.

 

This condensed consolidated financial information is for the six months ended 30 September 2021. It has been prepared with regard to the requirements of IFRS. It does not constitute statutory accounts as defined in S343 of the Companies Act 2006. It does not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2021 which contained an unqualified audit report and have been filed with the Registrar of Companies. They did not contain statements under s498 of the Companies Act 2006.

 

The Group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2021 annual financial statements, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 April 2021 and will be adopted in the 2022 financial statements. There are no standards impacting the Group that will be required to be adopted in the annual financial statements for the year ended 31 March 2022.

 

Basis of Consolidation

 

The consolidated financial statements of ZOO Digital Group plc include the results of the Company and its subsidiaries. Subsidiary accounting policies are amended where necessary to ensure consistency within the Group and intra group transactions are eliminated on consolidation.

 

Segment reporting

 

Operating segments are reported in a manner consistent with the internal reporting regularly reviewed by the group's chief operating decision maker to make decisions about resource allocation to the segments and to assess their performance.

 

 

Localisation

Media services

Software Licensing

Total

 

FY22 H1

FY21 H1

FY22 H1

FY21 H1

FY22 H1

FY21 H1

FY22 H1

FY21 H1

 

$000

$000

$000

$000

$000

$000

$000

$000

Revenue

12,906

9,940

13,122

5,416

899

1,037

26,927

16,393

Segment contribution

2,658

1,549

6,835

3,620

830

895

10,323

6,064

Unallocated cost of sales

 

 

 

 

 

(1753)

(948)

Gross profit

 

 

 

 

 

8,570

5,116

Gross profit %                                      21%

16%

52%

67%

92%

86%

32%

31%

                     

 

 

Functional and presentation currency

 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in US Dollars which is the Company's functional and presentation currency.

 

Transactions and balances

 

Transactions in foreign currencies are recorded at the prevailing rate of exchange in the month of the transaction. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year-end exchange rates are recognised in the income statement.

 

Group companies

 

The results and financial positions of all Group entities that use a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

·   assets and liabilities for each entity are translated at the closing rate at the period end date;

·   income and expenses for each Statement of Comprehensive Income item are translated at the prevailing monthly exchange rate for the month in which the income or expense arose and all resulting exchange rate differences are recognised in other comprehensive income with the foreign exchange translation reserve.

 

Earnings per share

 

Earnings per share is calculated based upon the profit or loss on ordinary activities after tax for each period divided by the weighted average number of shares in issue during the period.

 

Weighted average number of shares for basic & diluted profit per share

30 Sep 2021

     30 Sep 2020

31 Mar 2021

 No. of shares

 No. of shares

 No. of shares

Basic

82,429,164

74,547,389

74,597,495

Diluted

90,787,293

81,244,707

82,955,624

 

 

 

 

Where the Group has recorded a loss, diluted earnings per share is equal to basic earnings per share. 

 

Further Copies

 

Copies of the Interim Report for the six months ended 30 September 2021 will be available, free of charge, for a period of one month from the registered office of the Company at 7th Floor, City Gate, 8 St Mary's Gate, Sheffield, S1 4LW or from the Group's website: www.zoodigital.com.

 

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