Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — FY2011 Earnings Presentation
22 slides from Zoo Digital's earnings presentation, Aug 10, 2011
Slide 1: Preliminary Results and Share Placing
ZOO Digital Group Preliminary Results and Share Placing Stuart Green, CEO Helen Gilder, Group Finance Director 10 August 2011 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by ZOO Digital Group plc (the “Company”) solely for presentation purposes. It should not be reproduced, redistributed or passed to any other person. This document is being solely issued to and directed at (i) persons having professional experience in matter
Slide 3: Presenters
Presenters Dr. Stuart Green, CEO • Previously CTO of ZOO Digital Group, CEO of Kazoo3D plc, Technical Director of LightWork Design Limited • Became CEO in 2006 • Over 20 years experience in team building and executive management in the software industry • He has almost 30 patents granted in the fiel
Slide 4: About ZOO
About ZOO • We design innovative software intended to make our customers’ workflows more efficient • Our customers are global organisations that develop, process and deploy creative media content for different formats and languages 10 August 2011 4
Slide 5: Strategy
Strategy • Identify labour-intensive services • Design workflow management software based on automation and centralization without compromise to quality • License systems directly to brand owners, supplemented with services where appropriate • Deliver first rate customer service • Generate recurring
Slide 6: Case Study
Case Study A major Hollywood film studio – Automated production of DVD, Blu-ray and iTunes video titles – Online management of product translations for approximately 60+ languages – Centralised worldwide marketing campaigns for theatrical and home entertainment releases – Labour time reduced by appr
Slide 7: The Market and Growth
The Market and Growth • Established in the filmed entertainment market with customers including major Hollywood studios • Working with partners to expand business: – Multi Packaging Solutions • Interactive Entertainment • Healthcare/Pharmaceuticals – Apple Computer • Music • Electronic books • Growi
Slide 8: eBook Market Growth
eBook Market Growth • Suggested forecast of almost $1 billion spent in US on eBooks in 2010 (source: Forrester Research, November 2010) • US spending on eBooks expected to reach $3 billion by 2015 (source: Forrester Research, November 2010) • Market shares for eReaders: Amazon Kindle 47%, Apple iPad
Slide 9: ZOO's eBook Proposition
ZOO’s eBook Proposition • Providing workflow and automation software and related services for eBook production • Enabling publishers to repurpose traditional books for sale online – format and language adaptation • Focusing primarily on media-rich genres, including picture books, comics, graphic nov
Slide 10: Competitive Landscape
Competitive Landscape • We compete with many established providers of media production services • For video-related services, primarily Technicolor Creative Services and Deluxe Digital; for print- related services, primarily AGI Media and Schawk; for eBooks Trailer Park • We believe our competitors
Slide 11: Financial Results
Financial Results 16,000 14,000 Revenue Results to March 2011 12,000 10,000 8,000 • Termination of outsourced low- 6,000 margin subtitling work (value: $3.6m 4,000 2,000 in 2010) resulted in total revenue - reducing to $13.8m (2010: $15.1m) 2008* 2009* 2010 2011 Core business Subtitling † • Operatin
Slide 12: Share Placing and Restructure of Loan Notes
Share Placing and Restructure of Loan Notes • Placing of £1.7m at 40p • VCT qualifying under 2005/6 rules • Existing loan note of £3.541m, redeemable on 31 October 2011 at 48.75p with coupon of 6% restructured as follows: – 50% of existing loan note converted into equity at 40p – 50% of existing loa
Slide 13: Proposed Use of Proceeds to Fund Growth
Proposed Use of Proceeds to Fund Growth • Net proceeds of c£1.5m to be used to support acceleration of the business in new markets, particularly eBooks: – Infrastructure needed to establish ZOO as eBook aggregator – Additional R&D staff to accelerate eBook and EST software – Enlarged production team
Slide 14: Outlook
Outlook • Continuing to add innovative new products • Developing further opportunities to embed ourselves deeper within our clients’ operations • Plan to enter new markets with existing products • Diversifying revenue streams and broadening customer base • Continuing to manage long sales cycles and
Slide 15: Investment Summary
Investment Summary • Excellent customer relationships – significant growth potential • Clearly differentiated proposition – based on innovative software • Addressing customer needs in the current economic climate – improve efficiencies • High barriers to entry – sophisticated patent-protected softwa
Slide 16: Appendix
APPENDIX 10 August 2011 16
Slide 17: The Board
The Board Roger Jeynes, Chairman – Roger has over 20 years experience in the technology sector, encompassing senior sales, marketing and general management roles in the UK, Italy and the USA with IBM, Pyramid Technology Inc., and EMC Corporation. His most recent executive position was Chief Operatin
Slide 18: Major Shareholders
Major Shareholders Shareholder % of capital Stuart Green (CEO) 17.5% Foresight Group 15.9% Herald Investment Trust 15.1% Multi Packaging Solutions 9.0% Ian Stewart 7.0% JM Finn 6.5% South Yorkshire Investment Fund 5.4% Williams de Broe 3.5% Others 20.1% 10 August 2011 18
Slide 19: Loan Note Holders
Loan Note Holders Loan Note Holder % of loan note Foresight Group 54.6% South Yorkshire Investment Fund 12.7% Herald Investment Trust 10.4% Stuart Green (CEO) 9.7% JM Finn 8.9% Others 3.7% 10 August 2011 19
Slide 20: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income 2011 $000 2010 $000 Revenue 13,757 15,056 Cost of sales (2,388) (3,769) Gross Profit 11,369 11,287 Other operating income 135 177 Operating expenses (10,158) (11,503) Operating profit/(loss) 1,346 (39) Analysed as: Operating profit/(loss) before excepti
Slide 21: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position 2011 2010 $000 $000 ASSETS Non-Current Assets Property, plant and equipment 549 558 Intangible assets 8,480 6,903 Deferred income tax assets 486 - 9,515 7,461 Current Assets Inventories 80 365 Trade and other receivables 3,016 2,667 Cash and cash equivale
Slide 22: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 2011 2010 $000 $000 Cash flows from operating activities Operating profit/(loss) for the year 1,346 (39) Finance income - 1 Depreciation 424 419 Amortisation & Impairment 497 1,214 Share based payments 196 169 Purchase of own shares (124) - Disposal and derecogni