ZOO Digital sees breakeven

12/04/2010 Robert Tyerman

Stuart Green, CEO of ZOO Digital

Entertainment software and services provider ZOO Digital says turnover and earnings for 2009-10 should be ‘significantly ahead of market expectations’.

Based in Sheffield and California, the company, a former video games flop whose patented software can now in some cases halve the time taken to prepare completed films for general release, says it expects turnover for the year to last month of around $15 million (£10 million) and earnings before interest, tax, depreciation and amortisation (EBITDA) in the region of $1.6 million (£1.06 million). Chief executive Stuart Green is happy with suggestions of breakeven at the pre-tax level.

That compares with £6.6 million turnover and £1.3 million EBITDA for 2008-09, when AIM-quoted ZOO turned a £2.2 million loss into a £211,000 pre-tax profit. Green says the company, which has switched to dollar accounting to reflect the source of 90 per cent of its present business, still has one item which might somewhat distort the picture in the shape of a sterling-denominated convertible loan note.

According to Green, ZOO, which has yet to achieve its goal of breaking into Bollywood, has won a new patent for its anti-piracy software, which could stand it in good stead. Recommended by Growth Company Investor at 14.5p in July, the shares have more than doubled to 30.5p, valuing the company at £6.5 million. Hold on for now.