ZOO Digital | The Big Picture Newsletter

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Welcome to the Big Picture

Our quarterly investor newsletter featuring the latest news from ZOO

and updates from across the global entertainment industry.

Click below to watch our quarterly update video

ZOO successfully raises £12.5m

in oversubscribed Placing

In April, ZOO successfully completed an oversubscribed Placing of £12.5 million ($15.5 million) at a price of 160 pence per Placing Share. The Placing is intended to fully fund the proposed acquisition of one of our trusted partners in Japan, a media localisation subsidiary of a leading Japanese technology company. The acquisition would add specialist capability in Japanese language titles and extend our capacity in another fast-growing market.

The fundraise was supported by major existing shareholders, including Herald Investment Management and Canaccord Genuity Wealth Management, as well as new institutions joining the register. The Retail Offer raised a further gross proceeds of £162,787.20 on the same terms, demonstrating our commitment to private investors.

Please find the relevant announcement in full via the link below:

Confirmation of successful Placing of £12.5 million ($15.5 million)

Full Year Trading Update

ZOO has issued a pre-close trading update for the year ended 31 March 2023. Key highlights include:

Revenues are expected to grow at least 28% to over $90 million, of which 25% is organic. This was impacted by ZOO’s largest customer pausing some projects during a restructure, but normal levels of orders are expected to resume shortly.
EBITDA is expected to increase by at least 44% to over $12 million.
Strong balance sheet as cash doubled at period end to $11.8 million.

Further details will be made available in our full year results which are expected to be published in mid-July.

Please find the further detail on the trading update here

Progressive Equity note: ZOO Digital Group plc – Global ambitions taking shape (10 May 2023)

Global expansion continues

with further two investments

ZOO was proud to announce two more investments as part of our global growth initiative to satiate the growing demand for localised content.

Acquisition of remaining shares in ZOO Korea

In April, ZOO announced the acquisition of the remaining 49% of ZOO Korea. Since the Company acquired 51 per cent. of the equity in March 2022, ZOO Korea has successfully expanded to deliver an in-territory servicing hub for the most prestigious names in entertainment.

The Board estimates that $4.5 million of incremental revenues were recognised across the Group in FY23 as a result of ZOO Korea and that it will generate significant additional revenue for the Group in future years through its own operations in Korea as well as services provided assisting ZOO in the US and UK.

For more detail on the acquisition, please see the full announcement here

Iberian hub to expand operations in EMEA

ZOO has launched an Iberian hub with access to facilities in Madrid and Valencia, following a strategic investment in established dubbing and localisation company, AM Group. The 30% stake in AM Group will support delivery of EMEA dubbing services as part of ZOO's global end-to-end offering for major studios and streaming services in Iberia, while also supporting local content creators to expand their reach to global audiences.

Iberia is an increasingly important market for global content producers with Spain establishing itself as a European hub for audio-visual production and distribution. According to Statista, the subscription video on demand (SVoD) market in Spain is projected to grow by 8.49% (2023-2027) resulting in a market volume of US$1.77bn in 2027. This allows customers to watch as much content as they’d like at a flat rate per month driving a booming demand for new and exclusive content as OTT streamers compete for customers.

Building on the success of international hits such as Money Heist, Netflix launched its first European hub in Madrid in 2019 and has since more than doubled the size of its operations. Two out of the top five most enjoyed SVoD series in Q1 of calendar year 2023 were Spanish titles on Netflix, with La chica de nieve at #2 and Entrevías at #4.

For more detail on the launch, please see the full announcement here

On Artificial Intelligence (AI)

ZOO’s end-to-end services have long been powered by proprietary tech which has advanced innovation, streamlined processes and connected our global hubs to access new markets

The launch of AI chatbot, ChatGPT, has accelerated the debate around the use of artificial intelligence and, more specifically, Large Language Models (LLMs), of which ChatGPT is an example. In the area of translation, it is important to highlight a key difference between producing convincing literal translations of the written word – an area where LLMs excel – and on the other hand producing authentic adaptations of dialogue, which requires the high-level contextual understanding provided by our talented, specialist media translators. ZOO’s target customers are major global operators of streaming services so require the highest quality content in the industry.

ZOO has been researching AI technologies for several years and we are actively exploring opportunities to enhance our operations, optimise capacity and provide a degree of automation to the services we offer. ZOO is engaged in several projects to develop capabilities that are applicable to ZOO’s business, including through the exploitation of third-party tools, and where the approach is to enhance rather than displace established practices.

ZOO looks forward to building on its heritage as an innovator that well positions the company as a beneficiary of this rapidly evolving field of AI.

Celebrating the 100th NAB Show

The National Association of Broadcasters Show is the industry’s unrivalled global event for content professionals from all corners of the media, entertainment, and technology world. This year, as the show celebrated its centennial edition, ZOO joined forces with Amazon Web Services (AWS) for a schedule of innovation, discovery, and connection, having been invited to showcase our AWS-enabled globalisation services, solutions, and software at the AWS Create Partner Village.

Visitors to ZOO’s pod in the Partner Village met with members of our commercial and technology teams to learn more about ZOO’s technology-enabled localisation and media services. Chris Oakley (CTO) and Mazin Al-Jumaili (VP, Business Development) delivered a 20-minute innovation session about how ZOOstudio was conceptualised, designed, and developed to create an all-encompassing, vendor-agnostic solution to manage the unprecedented challenges facing the entertainment industry as content goes global.

The Small Cap Awards 2023 Nominations

We are proud to have been nominated for two Small Cap Awards this year – for ZOO Digital Group plc as ‘Company of the Year’ and our CEO, Stuart Green, as ‘Executive Director of the Year’. The Awards honour the best in the sub-£350m market cap quoted company sector and celebrate those professionals and companies that work within the AIM and Aquis communities.