ZOO Digital Group records fourth successive year of strong revenue growth

Stuart Green, the chief executive of Sheffield-based ZOO Digital, commented: “ZOO delivered a fourth successive year of double-digit revenue growth and margin improvement in FY23 (full year 2023) and we expanded our footprint in strategically important, high-growth regions.

"We generated strong cashflows and delivered record pre-tax profitability, demonstrating the benefits of the operational leverage in the business.

“The market has evolved rapidly over recent years as global audiences transition from traditional linear programming to streaming platforms.

"In this context, we view our customers’ strategic reviews and the Hollywood strikes as evidence that the industry is now recognising the structural nature of changes in how modern audiences watch film and television.

"Localisation is one of the most cost-effective ways to bring new content to global audiences, while also providing access to new markets and millions of additional subscribers.

"This is why we are investing ahead of the curve to expand our footprint in key international territories.

“While the current disruption is frustrating, the board remains confident that ZOO is fundamentally well positioned to continue our growth once the hiatus concludes.

"Over the medium and long-term, we expect to emerge stronger and take further market share as customers reduce their pool of vendors to those few with global end-to-end capabilities.”

For the major US media companies which are seeking to deliver their streaming services globally, competition remains intense, ZOO said in a statement to accompany the results.

The statement added: “The recent relative slowdown in subscriber growth from established markets has led to an increased focus on profitability and return on investment from content spend.

"The board believes that ZOO can benefit from this trend as media companies outsource greater volumes of work to a smaller number of trusted vendors. Furthermore, localisation is proven to be one of the most cost-efficient ways to increase viewership while scaling streaming services to reach new international audiences.”

To capture this demand, the company has continued to invest in establishing hubs in key international locations.

These investments have significantly increased its capacity across India and South Korea as well as Turkey, Scandinavia and recently Spain, helping ZOO win new business and attract talent, the company said.

In May 2023, the company successfully completed an oversubscribed placing of £12.5m for the proposed acquisition of a partner in Japan, which it described as another strategic growth market for content and localisation budgets.

The statement added: “The fundraise included investment from existing and new shareholders, as well as giving existing retail

investors the opportunity to participate, with several new institutional investors joining the register.”