LONDON (ShareCast) - (Sharecast News) - Shares in localisation and digital media firm Zoo Digital sunk on Thursday after the group warned that both revenues and underlying earnings would likely fall short of analyst expectations in FY25.
Zoo Digital expects FY25 revenues of roughly $50.5m, up 25% year-on-year, while underlying earnings were projected to be $1.0m, a marked improvement on FY24's $13.6m loss.

However, despite its return to underlying profit, Zoo Digital's FY25 underlying EBITDA result was more than 60% shy of analysts' expectations.

The AIM-listed group also warned that FY26 revenues would be lower than initially expected but claimed that profits should improve due to a series of cost-cutting efforts that reduced its fixed costs by 20% and the expectation that blended gross margins would improve to 36%.

"Based on current visibility, Zoo expects that dubbing revenues for FY26 will be lower than in FY25. However, with a lower cost base and higher margin revenue mix the overall profitability of the business is expected to improve significantly year-on-year," said Zoo Digital.

Zoo Digital added that while its order book had improved in recent months through the addition of several high-value projects, these were not included in its current expectations for FY25.

"The timing of revenue recognition for these projects is uncertain as commencement for much of this work is dependent on the supply of original assets from licensors. In addition, some projects in the FY25 pipeline relate to titles that customers have either delayed or cancelled," said Zoo Digital.

As of 1100 GMT, Zoo Digital shares had sunk 36% to 17.60p.









Reporting by Iain Gilbert at Sharecast.com

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