News blog
Zoo Digital
- BY: Andrew Hore |
- POSTED: 26/11/2009 |
Zoo Digital made an underlying interim profit without any help from foreign exchange movements.
Sheffield-based Zoo has developed software that speeds up the production and translation of DVDs and their packaging. This helps the film studios to save money. The latest software is a translation management system for the development and approval of art work. Zoo has also won a £350,000 grant to develop video restoration technology over the next three years in conjunction with the British Film Institute. Management is confident that this will become a product that can be sold around the world.
Zoo has changed its reporting currency from pounds to dollars because that is the currency of nearly all of its revenues. This gets rid of the previous foreign exchange translation gains and losses but it introduces a new translation gain or loss in the form of the value of the company’s sterling-denominated convertible loan notes. There was a $615,000 loss on translation in the latest interims.
Stripping out all the foreign exchange adjustments, Zoo moved from a loss of $489,000 to a profit of $387,000. Revenues increased 31% to $8.12m in the six months to September 2009.
Net debt was $5.42m at the end of September 2009. There was positive cash flow from operations but investment in intangibles and the foreign exchange movement meant that net debt increased.
The first half is the strongest part of the year. House broker FinnCap forecasts an underlying loss before foreign exchange of $300,000 in the year to March 2010.
Shares in Zoo fell 2.5p to 27p each, which values the company at £6.29m.
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