12th Feb 2014 11:23
LONDON (Alliance News) - Shares in Zoo Digital Group dropped 20%, making it the third biggest faller on the AIM index Wednesday, as it warned that it expects its pretax loss for the year ending March 31, 2014, to be "significantly" widened from the previous year.
This is as a result of lowered revenue expectations. Zoo expects revenue for the year to be around USD9.5 million. Zoo has also increased its investment in its cloud-based subtitle software ZOOsubs in order to meet demand, which it said will result in it reporting a loss before interest, tax, depreciation and amortisation of no more than USD400,000.
The media company noted that whilst it is "pleased with the momentum building in ZOOsubs, its revenue profile tends towards delivery as an ongoing service rather than as license sales."
Zoo expressed confidence in its progress, noting that the "prospects for [its] ZOOcore business remain strong and continue to contribute to ZOO's recurring revenues."
Zoo has extended the term of its convertible loan notes to October 31, 2013. It has also taken on a committed invoice financing facility of up to USD1 million to support its working capital requirements.
"Whilst it is disappointing that ZOOsubs volumes initially look longer than expected to build, we are pleased that this side of our business is gaining momentum," said Chief Executive Officer Stuart Green in a statement.
Shares in Zoo were trading down 1.88 pence at 7.62 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Zoo Digital