9th Nov 2015 08:51
LONDON (Alliance News) - Zoo Digital Group PLC shares were trading higher on Monday morning after the company said it managed to narrow its loss in the first half despite revenue taking a hit from a customer restructuring.
Zoo, which provides cloud-based media production services and software to media companies, said its pretax loss for the half to the end of September was USD6,000, compared to a USD638,000 loss a year earlier.
Revenue fell to USD6.6 million from USD6.9 million, mainly due to a restructuring undertaken by a major customer which started in the second half of 2014 and which resulted in a fall in sales from this client, which had contributed about a third of Zoo's sales previously.
But the group managed to drag down its cost of sales further than the revenue decline and improved its revenue mix bias to higher-margin services, all of which meant its gross margin in the half increased to 83.0% from 76.0% a year earlier, helping its pretax loss narrow.
The company said the margin improvement also meant its earnings before interest, taxation, depreciation and amortisation rose to USD900,000, more than double the USD400,000 it made a year earlier.
Overall client numbers at the end of the half rose 30% as Zoo looks to diversify its revenue base.
"The board is pleased with the progress achieved in the period under review, and in particular on the diversification of the business with overall client numbers growing by more than 30%," said Stuart Green, Zoo's chief executive.
"While the entertainment industry continues to undergo rapid change, we are confident that our range of services is appropriate to address the evolving needs of the market and remain cautiously optimistic about the group's future prospects," Green added.
Zoo shares were up 13% to 7.78 pence on Monday morning, one of the best performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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