ZOO Digital erases recent gains with mixed trading statement

Shares in ZOO Digital fizzled lower after the video games, film and TV globalisation specialist said full year revenue will be largely flat after disruption caused by the acquisition of one of its largest customers.

The AIM-listed company said it expected revenue for 52 weeks to 31 March to be roughly $11.6m versus $11.5m the previous year.

Although this major client contributed 24% of ZOO's revenues in the previous year, growth from new clients has more than made up for the shortfall.

Moreover, despite the loss of this client, ZOO has broken into the black, saying it expects to report EBITDA of approximately $0.2m compared to the EBITDA loss of $0.7m the prior year.

Gross margin remained strong at 79%, down from 83% the year before.

Recent developments included February's approval by Apple to offer iTunes aggregation services for TV series, and the expansion of its commercial team through two key appointments to focus on international business development.

Chief executive Stuart Green said: "We are entering our 2017 year with a stronger pipeline, a broader range of services and greater sales capability than ever before.

"The board is increasingly optimistic about the company's potential for growth."

ZOO shares, which earlier in the month hit their highest level in more than two years, were down 12% to 10.42p on Thursday morning.