Revenues fall but Zoo remains confident of a happy ending

In a trading statement for the year to March 31, the Sheffield-based company also said it expected to report earnings before interest, taxes, depreciation, and amortisation (EBITDA) of around £1.35m for the year to the end of March.

The company warned that revenues had fallen to about £8.6m from £10m the previous year, as a result of a change in the way customers are billed for some outsourced services and a short-term slowdown of orders.

Stuart Green, chief executive of Sheffield-based Zoo, said: “I am pleased with the group’s bottom line performance despite revenue falling slightly short of expectations.

“The short-term slowdown in revenues from a major customer is now reversing and I am encouraged to see activity levels in line with our previous expectations.

“We are also currently working with a number of new customers and prospects to apply our proprietary software to a broader range of authored content, addressing substantial additional markets.

“We believe this will lead to further diversification of our client base and therefore we continue to view the future with great confidence.”

Zoo said its year-end cash balance, of about £369,000, in addition to its overdraft facility, would give it enough working capital for the foreseeable future.

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 now also be downloaded.