ZOO Digital Group plc (LON:ZOO), the provider of localisation and digital distribution services for the global entertainment industry, today provides an update on current trading for the year ending 31 March 2018.
The Company is pleased to announce that growth has continued into the second half of the financial year with full year revenue expected to be at least $28m (year ended 31 March 2017: $16.5m). Adjusted EBITDA* for the full year is expected to be ahead of market expectations and at least $2.3m (2017: $1.8m). Localisation services (being subtitling and dubbing) continue to grow strongly and are expected to represent in the region of 70% of overall revenue (2017: 52%). Investment has continued in establishing the Company’s new dubbing service delivered through its proprietary cloud-based production platform and the Board is greatly encouraged by the response to this from both existing and new clients.
The Company currently has a gross cash position of $2.2m (as compared to $0.7m at 30 September 2017) and has significantly reduced utilisation of its working capital borrowing facility such that it expects that its only material borrowings at 31 March 2018 will be its long-term convertible loan notes.
ZOO’s planned technology developments include the application of machine learning to streamline the dubbing process for TV and film entertainment content, for which the Company has recently been awarded an R&D grant from Innovate UK, the Government-funded agency. This funding will support collaboration with a speech and hearing research group at the University of Sheffield and is expected to deliver capabilities that will improve the quality and speed of production for lip-sync dubbing projects.
ZOO has recently begun a new phase of its affiliate partner programme in order to establish services in the United Arab Emirates (UAE), enabling the Company to extend its reach in key countries in the Middle East. To support global digital distribution platform providers in their acquisition of regional content in the territory, ZOO’s partnerships will include services for the ingest of media and preparation of assets for delivery, in addition to providing access to linguists and voice acting talent for the expansion of the Company’s subtitling and dubbing services.
Stuart Green, Chief Executive of ZOO, commented: “We are delighted with the progress of our dubbing service and the positive response we have received from clients. Whilst this proposition is still in the investment phase, we have made significant strides in advancing and validating our proprietary technology, establishing our internal team, and building our network of freelance talent across multiple languages and countries. This will provide us with a platform for strong growth, therefore we expect to be operationally geared to achieve enhanced profitability in future periods.”