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.

Calendar 2023 marked a period of significant and unforeseen disruption for the entertainment industry following strategic reviews by major studios and Hollywood strikes that brought productions to a halt for six months. Following 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.

On 31 December 2023, the Group had net cash of $8.9 million and 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 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.

The persons responsible for arranging for the release of this Announcement on behalf of ZOO are Stuart Green, Chief Executive Officer and Phillip Blundell, Chief Financial Officer of ZOO.

In the TV interview below CEO Stuart Green provides an overview of the 6 months to 30 September 2022 and an outlook for the group