ZOO Digital has issued a cautious, but optimistic, trading update following a 2023 dominated by the resolution of the Hollywood strikes by actors and writers and strategic reviews by the major studios.
The provider of end-to-end cloud-based localisation and media services to the global entertainment industry was hit hard by the strife in Tinseltown. It took a major hit to earnings in the six-months to November 2023 and looked to expanding its operations in alternative markets including India and Turkey as a way of circumventing the strife.
Zoo told the markets in a trading update this morning:
“Following [strike] resolution in November, production companies have resumed projects with the expectation that the first of these would complete in January, accelerating into February and beyond.
“ZOO has now been notified by its largest customer of orders giving a pipeline and confidence of work for the next two quarters which is expected to deliver a strong recovery of revenues, and indicates demand for services and languages that are aligned with ZOO’s investment strategy.
“However, it is now clear that the completion of entertainment products is taking longer than expected. This will result in Q4 revenue being significantly lower than anticipated leading to a greater loss than previously expected for the full year. The pipeline is consistent with current market expectations for FY25 and a return to profitability.”
The group added that its cash reserves remained healthy at $8.9 million, and it expects to maintain a positive balance with unused debt facilities available at the March year-end and an improving cash balance in the first half of FY25 due to the recommencement of orders.
The company’s statement concluded: “The Board expects further clarity on the timing of projects and therefore revenue for the rest of the year in the coming weeks and will update the market further as necessary in due course.”
