Major Hollywood studios buy into Zoo’s cloud system

The Sheffield-based firm is in the process of diversifying its customer base and bringing new products and services to market.

Three of the six major Hollywood studios have now taken ZOOsubs products or services.

The company counts Disney, Universal and Warner Brothers among its big customers.

The group made adjusted earnings of £187,000 in the six months to September 30, compared with a loss of £187,000 in the second half of last year, but down on the £624,000 profit announced in the first half of 2012.

Analyst Andrew Darley at FinnCap said: “Momentum clearly remains strongly positive in new products and services, delivering revenue growth and reduced customer and product dependency. After a challenging second half to March, 2014 looks to be very promising.”

Stuart Green, CEO of ZOO Digital, said: “The board is pleased that the company has returned to an adjusted EBITDA profitability after a difficult second half of last year.

“We are already starting to see the benefits of the management actions taken last year and are pleased to be able to report some real momentum in the business, particularly with regards to ZOOsubs.

“The board expects the second half to show further improvement on the first half of the year, particularly in light of the interest received for ZOOsubs, and we would hope to see continuing growth in revenues in the next financial year and beyond.”

The group has cut its operating expenses by over £600,000. The revamp included a number of job losses in Sheffield, where all the software development is based, and in the US.

The majority of job losses were in the US, but the Sheffield workforce was reduced by 10 employees to around 30. Zoo declined to say how many jobs were lost in the US.

At the pre-tax level, the group made a loss of £480,000, down from a profit of £20,000 the previous half year.

Zoo has downsized the business and expanded into new areas, but Mr Green said he doesn’t anticipate any more job losses and the group is now recruiting in new areas.

Zoo, which helps media firms automate production on films, TV series and books, has moved beyond its traditional areas of DVD and Blu-ray into online. Mr Green said that the firm’s Zoocore cloud-based workflow management system is seeing growth in sales.