Cloud software provider Zoo Digital Group plc (LON: ZOO) announced that it had swung to a full-year loss owing to shrinking margins.
The company were able to book a rise in revenue to $28.8 million. However, this success was offset by the Company booking a $1.3 million loss for the full year through March, down $6.3 million from the $5 million profit on-year.
Further, the Company’s adjusted Ebitda fell from $2.4 million to $0.4 million, with its Ebitda margin also shrinking from 8.4% to 1.4%.
Zoo Digital CEO comments
With an unsurprisingly optimistic outlook, Company CEO Stuart Green alluded to the effects of the contracting DVD and Blu-ray market in his reaction to the update:
“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.”
Price Monitoring Extension
Shortly after posting their recent round of results, the Company posted another regulatory update, informing investors and press that they were to undertake a second price monitoring extension.
“A second and final Price Monitoring Extension has been activated in this security. The auction call period is extended in this security for a further 5 minutes.”
“Following the first price monitoring extension this security would still have executed more than a pre-determined percentage above or below the price of the most recent automated execution today. London Stock Exchange electronic order book users have a final opportunity to review the prices and sizes of orders entered in this security prior to the auction execution.”
Investor notes
The Company’s shares have rallied during trading on Thursday morning, up 8.77% or 5p to 62p a share. Analysts from finnCap have reiterated their ‘Corporate’ stance on Zoo Digital stock for the second time in June.
Elsewhere in the tech sector; Vela Technologies Plc (LON: VELA), Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN) and Codemasters Group Holdings Limited (LON: CDM) provided trading updates.