Zoo Digital swings to profit in first half

Zoo Digital said on Thursday that it swung to a pre-tax profit in the six months to the end of September as revenue grew 18%.

First-half pre-tax profit came in at $421,000 versus a loss of $6,000 in the same period a year ago, as revenue rose to $7.8m from $6.6m.

The company, which provides subtitling and digital distribution services for the entertainment industry, said overall client numbers were up 29% on the corresponding period a year ago.

Zoo said revenue sources have diversified, with the largest client accounting for 47% of invoices, down from 64% in the prior period, and 90% of invoicing attributed to the 16 largest clients versus nine last year.

The group said it continues to manage the business throughout the period within available facilities and with a small net cash outflow from operating activities.

It added that recent currency movements were favourable as the majority of its revenues are received in US dollars, while around a third of its costs, including the servicing of borrowings, are incurred in sterling.

Chief executive officer Stuart Green said: “The board is pleased with the progress achieved in the period under review, and in particular with the addition of significant new clients and diversification of revenue sources. Our cloud technology enables content providers worldwide to meet increasing regulatory requirements for the delivery of online entertainment.

“We believe that Zoo has the opportunity to grow consistently and win significant market share in digital distribution and localisation - a large and expanding segment of the media and entertainment industry."

At 1000 BST, Zoo shares were up 22% to 9.75p.