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News
23/09/04 Interims
Zoo's rapid growth
continued with interim results showing a 131% increase in sales to £3m for the half-year to the end of June 04. Despite losses widening to £1.2m from £1m the Company remains confident that it can hit its target of
profitability by the end of the year. Net cash outflow from operating activities also widened to £1.2m but the Company had £3m left in cash and this should easily see the company to break-even even if it did
encounter some hiccups on the way. The second half of the year will be the busiest in its history with no less than 30 SKUs due for release across all major platforms. The majority of the Company's second half sales
are expected to come from traditional video games publishing, a trend that now looks set to continue from hereon. Interactive DVD publishing remains a material part of the publishing strategy although it will be
overtaken by video games in 2H04.
Zootech has yet to contribute a meaningful sum to overall sales although it was only formally launched in the first half of the current year and is expected to deliver sales of around £0.5m by the end of the year with strong growth continuing into 2005.
28/10/04 DVD-Extra Developer Alliance announced
Zootech,
Zoo's enhanced DVD interactivity technology division has launched a developer initiative to promote the Company's DVD-Extra technology and its development partners worldwide. The initiative, which has 15 founder
members, follows an official launch event for the technology earlier in the year. The Company has reported a strong deal pipeline for DVD-Extra with some 100 products expected to have launched by the end of 2005.
18/02/05 Profits warning
Zoo Digital have given a
trading update today, warning that despite the expectation of continued strong sales growth, the Company's FY05 results (15 months to 31st March, following year-end change from 31/12) will be below expectation. The
shortfall has arisen principally because of delays to revenues expected from two areas, the Company's Crimelife development project and its Zootech division. Crimelife is being developed for Japanese publisher
Konami who recently took the decision to expand the geographic extent of its publishing role to cover North America. As a consequence, Zoo will miss out on up-front licensing revenues that it had originally
anticipated from the sale of these rights to a third party but will benefit from enhanced royalty flow once the product is released.
The Zootech division continues to attract broad interest from potential
customers but is not converting them at the rate originally anticipated by the board. One DVD-Extra project, valued at $1m, is reported to be taking longer to conclude than originally anticipated and this, in
particular, has contributed to the lowering of expectations for FY05. However, Zoo is confident that the deal will conclude and will now benefit the Company's next financial year.
05/04/05 New product announcements
With sales in
excess of 750,000 units on its last outing, Zoo's Who Wants To Be A Millionaire interactive DVD series is to continue with a new version to be released later this year by publishers Universal Pictures, T-Online and
Novyi Disk. The series is not only proving a lucrative business area for Zoo but also serves to highlight and promote the Company's interactive DVD technology. Zoo takes a licence fee on all WWTBAM DVDs sold.
The
licensing deals come a few days after the Company unveiled its entry (albeit via licensing deals with third parties) into the mobile games market. Zoo has granted mobile development and publishing rights for several
titles from the former Gremlin games portfolio including best-selling platformer Zool (picked up by In-Fusio) and the range of Actua Sports products (picked up by Tuna Mobile). The mobile games download market has
exploded over the last 18 months. According to a recent Screen Digest report, North American and European downloads grew some 500%
in value during calendar 2004 to reach €332m. Whilst this is unlikely to represent anything but a useful revenue stream for Zoo (few product achieve more than a few hundred thousand downloads and Zoo will get only a fraction of the average €4-€5 download price), mobile gaming may represent one of the long-term directions that the Company might steer itself towards.
14/04/05 New publishing deals
Zoo has acquired the
rights to publish 22 handheld games from US publisher Destination Software. The two year deal comprises European publishing rights for a mixture of Nintendo DS and Nintendo Game Boy Advance stand-alone and
compilation titles. Zoo will pay a royalty advance for the titles.
25/05/05 Placing and trading update
Zoo has
raised £3.2m (pre expenses, £3m post) via a placing with both existing and new shareholders. The fund-raising was at an approximate 20% discount to the average share price over the previous few weeks but was
reported to have been oversubscribed. The new money is being used to fund continued expansion into new technical and geographic markets and to accelerate the commercial deployment of existing technologies.
Zoo
also used the placing announcement to confirm its recent trading performance with turnover from its publishing division a notable area of growth, increasing from £5.1m in 2003 to over £11m for the 15 months to
31/03/05. The full results are expected to be unveiled at the end of June but are expected to be in line with expectation.
29/06/05 FY05 results announced
Zoo unveiled its FY05
figures showing a 149% increase in group sales to £12.7m , almost all of which was attributable to the Company's publishing division whose sales grew from £5.1m in the previous period to £12.3m in FY05 (albeit a 15
month period). However, Zoo's increased commercial focus on games publishing and its resultant, dramatically improved top line could not prevent the Company's net losses increasing from £1.5m to £2.2m as the Company
continues to invest in its interactive DVD technology division, Zootech. Zoo has now signed over 50 licence agreements for use of its DVDExtra interactive DVD technology and expects 150 products to be developed by
the end of March 2006 as a result. Zoo's licensing model appears to be predominantly back-end loaded with no up-front licensing fee, just royalties payable on every DVDExtra-enabled title sold although it is still
expecting to generate $1m from a single studio licensing deal in FY06. This suggests that front-end deals may become the standard for the larger studios whose higher DVD shipment volumes may preclude any royalty
share deals.
Despite the significant contribution from the interactive DVD and games publishing division (which generated EBITDA of £0.5m in FY05), Zoo continues to place greater strategic emphasis on its DVD
technology division. However, the Zoo Digital Publishing (which also incorporates the Hothouse development team creating Crimelife for Konami) is still expected to generate the majority of sales in FY06 with the
release of Crimelife, the launch of an array of new Nintendo Game Boy Advance and DS products and the continued release of new interactive DVD products. Following the Company's recent £3m fund-raising, Zoo appears
comfortably positioned to capitalise on both its growing games and technology divisions and the group is expected to reach profitability in the current financial year.
18/10/05 Walt Disney revealed as licensing partner
The
$1m deal mentioned by the Company in several previous releases has finally been signed with Walt Disney being unveiled as the customer. Interestingly, the deal is not for games-related interactivity applications but
for menu regionalisation using the Company's DVD-Extra Studio software. Undoubtedly stimulated by this deal, the Company also revealed that it intends to establish a greater focus on the North American market with a
number of personnel changes taking place including the relocation of staff to the USA.
14/12/05 Interim results
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