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Zoo Digital Group PLC on Tuesday said it expects to return to growth after posting weaker full-year financial performance after the US entertainment industry faced widespread industrial action. The Sheffield, England-based provider of cloud-based localisation and media services to the global entertainment industry swung to a $20.4 million pretax loss in the year that ended March 31 from a $7.9 million pretax profit the previous year. Total revenue fell 55% to $40.6 million from $90.3 million, while cost of sales declined 38% to $35.2 million from $56.3 million. Media Localisation revenue declined 52% to $27.2 million and Media Services revenue dropped 63% to $11.9 million. Chief Executive Officer Stuart Green said: ‘It has been a year of unprecedented challenges for the entire film and television entertainment industry as the Hollywood writers and actors strikes brought new productions to a standstill. ‘This has required difficult decisions to conserve cash while positioning the business for the market recovery that is in progress. Customer demand has improved recently as delayed 2023 productions have completed, with Zoo’s technology platforms, global reach and trusted reputation positioning us well as the recovery continues.’ Due to the US being Zoo’s main country of operations with 79% of revenue coming from overseas clients, the strikes were the primary cause of lower revenue. Zoo’s net cash balance at period end stood at $5.3 million, down 55% from $11.8 million at the end of financial 2023. In the first quarter of financial 2025, Zoo has expanded its order book by 35% over the previous quarter. Looking ahead, Zoo expects to meet full-year targets with growth in revenue and earnings before interest, taxes, depreciation, and amortisation anticipated in the first half. ‘Market analysts forecast recovery continuing until late 2025 as the strategic changes implemented by major media companies, which include those relating to content commissioning and acquisition, start to work through, at which point a return to former levels of content spend, both globally and in Hollywood, is anticipated,’ Zoo said. Zoo Digital shares were down 12% to 55.50 pence each in London on Tuesday afternoon. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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