ZOO Digital Group plc (AIM: ZOO), a leading provider of end-to-end cloud-based localisation and media services to the global entertainment industry, today provides an update on trading and its debt facilities.

Debt Facility and Cash position

Further to the trading statement of 26 March 2024, the Company has since renewed for a further twelve months debt facilities of up to $3 million with HSBC. These facilities remain fully undrawn but provide the Company with enhanced financial flexibility for working capital purposes in an improving market environment.

Year-end net cash on 31 March 2024 was $5.3 million, significantly better than indicated previously following stronger collections than anticipated in the month of March.

Current Trading

Customer demand has continued to recover with March 2024 invoicing the highest month since April 2023 following acceleration of the Company’s pipeline. Work has continued to expand throughout March and April 2024 and visibility extends to September 2024. Revenues for FY25 Q1 are expected to be 36% up on FY24 Q4 which, together with recently implemented cost savings, is expected to result in EBITDA at break-even in Q1.

The Company has now received dubbing and subtitling orders from the major film and TV distributor for which it was recently appointed as a primary vendor as referenced in the announcement of 26 March 2024.

ZOO’s strategy remains focused on developing and deploying innovative technology to provide leading and differentiated end-to-end services to its customers. This includes the use of Artificial Intelligence to augment and complement processes where applicable. The strategy is achieved through a capital-efficient approach involving production hubs in key locations to provide a 24/7 service offering, which the Board believes will deliver profitable revenue growth.

With market commentators forecasting a return to 2022 levels of entertainment output in 2025, the Board continues to see opportunities to rebuild revenues following the significant industry disruptions of FY24 and is confident of at least meeting FY24 market expectations*.

Notice of Full Year Results

The Company expects to announce full year results for the period to March 2024 in early August 2024.

* The Company understands market consensus for FY24 to be revenue of $39.7 million, EBITDA adjusted for share based payments loss of $14.0 million and net cash of $3.7 million.