Shares in media tech company Zoo Digital tumbled by more than a third on Thursday after a downbeat trading update disappointed investors.
The AIM-listed group said it expects revenue for the year to reach at least $50.5m (£40m), a quarter greater than the year before with an EBITDA profit of around $1m, up from a $13.6m loss.
This would be an EBITDA profit more than 60% lower than analyst predictions, dragging the share price down from 27p to 16p at the opening of trading on Thursday.
The update warned that revenue for FY26 was expected to be lower, though it claimed that through various cost-cutting measures, profits were set to improve.
Zoo Digital said that its order book had grown in recent months with the addition of a handful of new projects not included in its expectations for its upcoming end of year report. Currently the timing of revenue recognition for these projects is “uncertain” as they are “dependent on the supply of original assets from licensors”.
Zoo Digital is a media tech company that partners with studios and streaming providers, offering dubbing, subtiling, metadata creation, media processing and localisation services. Partners include Netflix, Amazon Prime, NBC and HBO.
The group was listed on AIM in 2000 and that same year achieved its peak share price of 4,462.21p. Within three years shares had collapsed by more than 90% and after a brief resurgance in the mid-2000s, they fell by as much as 99% by the end of 2008.
The 2023 strikes in Hollywood that froze film and television production for months hit the company hard with the share price more than 90% lower than its 2023 peak of 207.5p.
Zoo Digital CEO Stuart Green said last year: “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.”
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