Revenue plummeted by 58% at subtitling, dubbing and localisation business Zoo Digital, as the Hollywood actors’ and writers’ strikes pushed the business to a $10m loss.
Revenue fell to just $21.4 million in the half-year to 30 September, as production of American film and television - which Zoo provides subtitles for - stalled.
Stuart Green, CEO of ZOO Digital, said: "The year to date has been overshadowed by the first joint strike of Hollywood actors and writers in more than 60 years. This temporary disruption has had a significant impact across our sector and the wider media and entertainment industry, resulting in artificially low production volumes in the short-term. While this has had a significant impact on our financial performance, we have taken targeted measures to conserve cash while positioning the business to recover rapidly once orders return to more usual levels.”
The strikes ended this autumn, but it will take time for new films and programmes to be completed. Zoo expects to make a full-year loss in 2023-24, breaking even in the fourth quarter.
"With the resolution of the strikes, we look to the future with optimism and anticipate a phased return of orders in the second half, accelerating into FY25. We remain confident in the industry's long-term structural growth drivers and our role as a trusted partner to many of the world's largest entertainment companies."
The shares initially fell by another 3.7p, or 6.6% to 52.3p this morning, valuing the business at a little over £50 million, but they rebounded to hit as high at 59.6p. They’re down more than 70% since the start of the year, but up 55% from the lows reached in October, before the strikes had been fully resolved.
Dan Ridsdale, head of technology at Edison Group, said: “There is a chance that the company comes out of this stronger. The resolution of strikes in September and November sets the stage for a phased return of orders in H2 and management anticipates a significant sales increase in FY25.
“Strategically, we believe that the industry is likely to gravitate to a smaller number of technology enabled suppliers able to offer consistency, end-to-end capacity and scale. Revenues could step up again if the company is successful in adding another major streaming platform.”