Exciting times ahead, says Zoo as it hits profit

The Sheffield-based group said profits have improved thanks to its focus on higher margin areas.

"There are new exciting times ahead for Zoo," said chief executive Stuart Green. "We are building foundations for future growth, we're putting in place relationships that will deliver revenues in the future."

He said that it takes time for big clients to switch over to its software solutions, but once they do it creates an excellent foundation for growth.

Operating profits for the six months to September 30 rose 36 per cent to 556,000 and the group made a maiden interim pre-tax profit of 245,000, which compares with a loss of 147,000 last time.

Zoo has launched a new service that allows full movie material to be downloaded via the Apple iTunes platform.

Previously the cost of producing the extras that come with DVDs has been prohibitive for the on-line version, so customers downloading films from the internet were only offered the basic film.

But the company's new software means that popular extras such as stills, deleted scenes, exclusive interviews and behind-the-scenes footage can also be downloaded.

"Whilst our short term growth depends on our existing market of major Hollywood studios, during the course of the year we have started to explore the applicability of our software tools to a much wider audience," said Mr Green.

Revenues were flat on last year at 5.1m, but profits benefited from the focus on higher margin business.

Zoo said it is in advanced talks with new prospective clients about its Multi Packaging Solutions (MPS) collaboration. Zoo is selling its unique software to US companies that export around the world.

MPS's clients include major pharmaceuticals and video games producers.

The group has also entered talks with an illustrated book publisher for e-book production, which could lead to another new source of revenues.