26th Jun 2019 11:39
(Alliance News) - Zoo Digital Group PLC on Wednesday said it swung to profit in its most recently ended financial year, due to a revaluation of a derivative, but its revenue growth was hurt by challenges in its legacy DVD and Blu-ray digital packaging business.
The cloud software company reported a pretax profit of USD1.3 million for the year to the end of March compared to USD5.0 million loss made last year, while revenue rose slightly to USD28.8 million from USD28.6 million.
Zoo Digital said it gained USD2.7 million after the reduction in the fair value of an embedded derivative. The non-current liability was reduced to GBP2.0 million from GBP4.7 million.
"2018-19 was a challenging year as our largest client changed the way it engages with its supply chain and our legacy DVD and Blu-ray digital packaging business declined faster than we had anticipated," said Chief Financial Officer & Secretary Phillip Blundell.
Blundell said the slightly positive movement in total revenue came from a 4% increase in the Localisation unit, offset by a 12% decline in Digital Packaging and a 4% decline in Software Solution.
The majority of Zoo Digital's customers are in the US, it said, where revenue decreased by 3% to USD25.4 million. Meanwhile, in Europe and Asia revenue more than doubled to USD2.7 million.
Looking ahead, Chief Executive Stuart Green said: "Trading in the new year has begun well."
"The end market into which we are selling our cloud-powered services continues growing and the traction that we are gaining with each of our services gives us great confidence that the business is well placed to meet opportunities and growth in the years to come."
Zoo Digital shares were trading 12% lower on Wednesday in London at 58.25 pence each.
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