ZOO Digital shares drop sharply after annual results

AIM-listed media localisation specialist ZOO Digital (LON:ZOO) saw its share price plunge by 12.88% to 57.50p (as of 16:00 BST) after it booked an operating loss for the year ended 31st March. Revenues budged slightly upwards despite some client-side disruptions and the company was confirmed as a preferred partner by Netflix.

CEO Stuart Green commented: “We have worked hard over the course of the year to enhance our offering, build up our network and differentiate ourselves further from the competition. ZOO now has the technology, the people and the local expertise to enable our clients to deliver content across multiple territories and in multiple languages simultaneously and efficiently. To be chosen as a primary vendor of localisation services for large media companies requires us to demonstrate significant global capacity, and in this regard, we have made excellent progress that puts us in good stead as we continue to grow.

Trading in the new year has begun well. Whilst the significant decline in legacy DVD and Blu-ray formats in our digital packaging segment has continued, now leading us to not forecast any significant income from this business line in the future, this has been offset by strong growth related to Over-the-Top (OTT) delivery. We expect ZOO to be confirmed as a preferred vendor to a greater number of clients and lines of business during the course of the year ahead. Our caution around timing is reflective of the dynamic nature of the OTT marketplace and recent experience.

The end market into which we are selling our cloud-powered services continues growing and the traction that we are gaining with each of our services gives us great confidence that the business is well placed to meet opportunities and growth in the years to come“.