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Overview

ZOO Digital Group PLC (AIM: ZOO) is a provider of localisation services allowing TV and movie content to be subtitled and dubbed in any language and prepared for sale with all major online retailers. ZOO’s clients are some of the best-known brands in the world including major Hollywood studios, global broadcasters and independent distributors.

ZOO’s point of difference in the marketplace is its development and use of innovative cloud technology. This ensures that content is localised in any language and delivered to all the major online platforms such as Amazon, iTunes, Google and Hulu with reduced time to market, higher quality and lower costs. ZOO’s agile, cloud-based business model enables clients to respond to market trends, scale easily with business growth and capitalise on new routes to market in the fast moving and evolving digital industry.

ZOO operates from the entertainment hubs of Los Angeles and London with a development and production centre in Sheffield. Its full-service proposition includes digital distribution, subtitling & captioning, metadata creation & localisation, dubbing, artwork localisation, workflow and asset management.

www.zoodigital.com

Directors

  • Roger D Jeynes (Chair) – 20 yrs global experience in tech sector. NED Downing Three VCT plc, The Development Bank of Wales plc, mxData Ltd & Charborough Capital Ltd.
  • Dr Stuart Green (CEO) –  25 yrs sector experience. Established ZOO’s business strategy & difference in the market by using technology to innovate. Responsible for securing 30+ patents in ZOO’s intellectual property portfolio.
  • Helen Gilder (CFO) – 25 yrs sector experience. Joined ZOO to assist with the initial float in 2000 becoming CFO in 2006.
  • Gordon Doran (Commercial Director) – Responsible for N. America operations. Pivotal in establishing relationships with the ‘big six’ Hollywood studios.
  • Mickey Kalifa (NED) – Chartered accountant with 30yrs tech, media & gaming experience. Ex CFO AIM-listed Sportech.

Financials

P&L2017
US$~000
2016
US$~000
Revenue16,48811,638
Cost of sales(4,483)(2,399)
Gross Profit12,0059,239
Profit/ (loss) for the year791(787)
BALANCE SHEET2017
US$~000
2016
£~000
Cash & cash equivalents6073,505
Total assets12,83415,732
Total liabilities(10,273)(8,819)
Net assets2,5616,913

Peer Group

  • Keyword Studios (AIM: KWS): Localisations services for gaming
  • LoopUp (AIM: LOOP): Remote meeting and conferencing software
  • Ideagen (AIM: IDEA): Data capture software
  • Proactis (AIM: PHD): Cost control software

Major Shareholders

Directors

  • Dr Stuart Green – 15.63%
  • Roger Jeynes – 0.46%
  • Helen Gilder – 0.1%
  • Mickey Kalifa – 0.07%
  • Gordon Doran – 0.01%

Other

  • Herald IM- 14.24%
  • Hargreaves Lansdown – 9.23%
  • Hargreave Hale – 9.18%
  • Old Mutual – 6.18%
  • Interactive Investor- 4.57%
  • Redmayne Bentley – 3.85%

Macro Indicators

FinnCap Note (April 2017)

“The entertainment industry is in a state of recovery, whereby a growing demand for the digital distribution of media is offsetting a long-term trend of declining DVD sales. Evidence of these trends can be seen in US data, the world’s largest entertainment market with electronic sell-through sales growing by 18% and subscription streaming services by 25% in 2015. This was in direct contrast to the continued fall of the physical sales and rental market, which (combined) fell by 11%. The resulting overall industry growth was +1%.”

Deloitte: 2018 Media & Entertainment Outlook

“Video on demand. Content streaming. Hyper-targeted content and advertising. These are just a few of the developments that will transform the media and entertainment industry this year, according to Kevin Westcott, vice chairman and US Media and Entertainment leader, Deloitte Consulting LLP.”

Media coverage

Shares (Nov 2017)
“Zoo Digital is finding its growth voice – Streaming TV boom to spark big demand drive for Zoo Digital”

Thisismoney.co.uk (March 2018)
“Zoo Digital’s shares soared as it forecast better-than-expected revenue and a tie-up in the United Arab Emirates. In a trading update, the Sheffield-based firm, which provides subtitle and dubbing services to Hollywood studios, said full-year revenue for the 12 months to March 31 would be at least £20.2million – 70 per cent higher than the year before. Zoo says it is planning to use machine learning to improve its dubbing services for film and TV content. Shares jumped 6.6 per cent, or 4.5p, to 73p. 

Broker Coverage

FinnCap (March 2018 – House Broker)
“Momentum has continued in H2, such that the company now expects FY18E sales and EBITDA (of at least) $28.0m (prev: $26.0m) and $2.3m (prev: $2.0m), implying impressive y-o-y growth of 70% and 31% respectively.”

FinnCap (Nov 2017 – House Broker)
“in H1, ZOO continued to scale its Localisation business rapidly…A notable highlight was the launch of ZOOdubs, which materially increases the company’s addressable market and enables greater wallet-share from existing customers. An early validation of the service was the successful completion and delivery of dubbing projects for a global entertainment client.”

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