Zoo Digital sees ninefold improvement in earnings for full year

Zoo Digital, a provider of subtitling and digital distribution services, expects to see a “significant improvement" for the 2017 financial year, as the company’s performance in the first half has continued into the second.

The AIM-listed company said that the historical weighting towards the first half, due to its reliance on a small number of customers and the seasonality of the home entertainment market, had seen a shift with good momentum continuing into the second half, meaning it was showing less seasonal variation in revenue and earnings than in previous years.

For the 2017 financial year, earnings before interest, tax, depreciation and amortisation is expected to be at least $1.8m, which would be a significant improvement on the $0.2m of the previous year.

Chief executive Stuart Green, said: “This performance demonstrates our success to date in diversifying our revenue streams but also points to the transformational change that the entertainment industry has undergone and the strength of our offering for digital distribution."

The company said that cash flow has improved month-on-month, but the overall working capital position is currently constraining the volume of new business that it can take on.

It had net current liabilities of $4.3m at 31 December 2016, which includes $3.8m in convertible unsecured loan stock held mostly by major shareholders, with which the company is currently discussing extending the term.

Shares in Zoo Digital were up 8.46% to 9.49p at 1000 GMT on Thursday.