22nd Jan 2019 10:12
LONDON (Alliance News) - Shares in Zoo Digital Group PLC plummeted Tuesday after the entertainment industry digital distributor said its annual revenue is expected to be about 10% lower than expectations.
Shares in Zoo Digital were down 46% at 62.00 pence each.
Zoo Digital - which provides cloud software based subtitling, dubbing and media localisation services - expects revenue in the second half of its financial year to be comparable to the first half.
In the first half of its current year, Zoo Digital reported revenue of USD14.9 million, suggesting just under USD30 million for the full year. For the year ended March last year, the company's revenue was USD28.6 million.
The company said its trading in the second half began "encouragingly" but its performance was affected by the loss of a single, material localisation project in the period.
Zoo Digital said the project cancellation was "wholly unrelated" to the company.
On top of the that project loss, Zoo Digital said revenue from processing legacy DVD and blu-ray titles in the second half was "significantly" lower than expected due to "overall market decline".
"Whilst we are disappointed to fall short of expectations, albeit primarily due to one off occurrences, we are encouraged that we have seen year on year growth across our key service lines being dubbing and subtitling, as well as having successfully delivered projects for a number of new clients," said Chief Executive Officer Stuart Green.
Green continued: "We remain confident that the company's strategy is correct and will enable us to capitalise on the long-term opportunity. We are now enjoying a growth in orders from our largest clients and expect to add significant new accounts during the remainder of the second half."
Zoo Digital said it expects to be profitable and cash generative in the second half. The company expects to close the year with a cash balance "broadly" in line with the previous year. At March 31, Zoo Digital held GBP2.4 million in cash and cash equivalents.
Green added: "With several major media companies recently announcing their intention to launch over-the-top services, there is no doubt that the market will continue to expand significantly and with it the growing demand for the premium services offered by Zoo. Our excitement for the future remains undiminished."
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