Film and TV subtitling specialist Zoo Digital says the Hollywood writers’ strike is continuing to cause problems in its market, leading to significant losses.
The Sheffield-based firm issued a statement ahead of its AGM in which it said subdued demand for its services continued, forcing it to revise expectations that orders may recover next month. As a result, Zoo has halted long awaited plans to acquire a Japanese company which was intended to boost its market position in South East Asia.
Gillian Wilmot, chairman of Zoo said a resolution to the Writers’ Guild of America strikes is essential for its market to return to normal. She said: “The market disruption and temporarily subdued demand for localisation and media services outlined in the full year results on 10 August 2023 are continuing. Major media organisations are in the process of realigning for profitability, and industrial action by writers and actors is ongoing.
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“Consequently, visibility remains limited, and resolution of the strikes is essential for normal order flow to resume. There has been encouraging progress over the last week in negotiations between the Writers’ Guild of America and the Association of Motion Pictures and Television Producers resulting in a provisional deal that it is expected will pave the way for writers to resume work.
“Despite this progress, the ongoing disruption continues to have a significant short-term impact and market expectations for Zoo’s FY24 outcome assumed former order levels would resume from October 2023. This now looks unlikely, and therefore a range of revenue outcomes for the second half of the financial year is possible ranging from a similar level to the first half to an increase in revenue in Q4.”
Zoo investors on the London Stock Exchange were told the firm has a strong cash position and that cost reduction plans are under way in a bid to break even in the fourth quarter of the year. The firm said changes afoot at the major media companies it supplies were likely to bring benefit. That includes studios engaging with fewer, more capable suppliers, and an “accelerated transition to an end-to-end approach”.
Ms Wilmot added: “Zoo’s strategy is in alignment with the needs of its current and potential customers and the Board expects the Group to be well positioned for enhanced growth once former order levels resume, in line with our medium and long-term aspirations. The structural drivers for international, multilingual content remain firmly in ZOO’s favour.”
Zoo warned of the turmoil in the market when it published strong results in August. Performance in the year to the end of March saw a 28% rise in revenues to £70.9m ($90.3m) and a four-fold growth in operating profit to £6.2m ($8.1m).
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
