Interim Results

Zoo Digital Group PLC
18 August 2003


For Immediate release                                             18 August 2003


                             ZOO Digital Group plc

             Interim results for the six months ended 30 June 2003


ZOO Digital Group plc, the AIM listed interactive digital entertainment group,
announces interim results for the six months ended 30 June 2003.

Highlights
     
•    Turnover increased to £1,296,000 from £274,000 in the same period year
     last year.

•    Loss before interest, tax, depreciation and amortisation of £(731,000)
     compared with £(976,000) in the same period year last year.

•    Successful share placing concluded raising £1.4m net.

     •    Cash balances of £1,796,000 as at 30th June 2003 (£2,162,000 as at 
          30th June 2002).

•    Multi territory licensing agreement concluded with Universal for 'Who Wants 
     To Be A Millionaire?' Interactive DVD game. Products for release in UK and 
     France in Q4 2003 delivered on time.

     •    Continued investment in revolutionary DVD-ExtraTM authoring system

•    Four further patents filed in the UK, USA and in multi territories under 
     the Patent Cooperation Treaty

•    Early Adopter programme for DVD-ExtraTM   established with 30 companies 
     including Warner, Ascent Media, Technicolor and Comchoice.

•    Games publishing schedule established with 24 products on GameBoy Advance, 
     PlayStation 2, PSOne, PC and Gamecube, being released in over 5 territories 
     during the second half of 2003.

Commenting on the Group's progress to date, Ian Stewart, CEO of ZOO Digital
Group plc said:

'The explosive growth in DVD has been well documented and consumer demand for
richer interactive content is something the major entertainment publishers are
keen to capitalise upon. Our proprietary DVD-ExtraTM  authoring technology,
which allows the creation of far richer and more advanced interactive content
for use on standard DVD players, is being well received by third parties. There
has also been great interest from IP holders as to how DVD-Extra can extend
brands and feedback from our Early Adopters programme has been positive. 'The
work we are doing with Universal Pictures for the release of the 'Who Wants To
Be A Millionaire?' Interactive DVD game in the UK and France this Christmas is
also very promising.

'The videogame publishing arm of the business is also progressing well and we
will be releasing 24 products over a number of platforms in over 5 territories
during the second half of 2003.  These releases, together with the revenues
generated from DVD Extra will pave the way for solid future revenue income and
place ZOO Digital Group in a strong position for a move to profitability in the
current financial year and significant growth thereafter.'


Enquiries:

Ian Stewart, Chief Executive
ZOO Digital plc                                   Tel: [phone]
www.zoodigitalgroup.com

Alasdair Robinson
Noble and Company Limited                         Tel: [phone]

Paul Vann/Ken Rees
Binns & Co PR Limited                             Tel: [phone]


Chairman and Chief Executive's Statement

ZOO Digital Group plc ('the Group')

Introduction

The six months to 30th June, 2003 was one of significant progress for the Group.
The successful fund raising has allowed the Group to invest further in the
DVD-Extra technology and further develop its position in the video games market.

Financial Review

The Group increased sales for the six months ended 30th June 2003 to £1.29m
(2002: £0.27m) with a loss before interest, tax, depreciation and amortisation
of £0.73m (2002: loss of £0.98m). The retained loss for the period decreased to
£0.99m (2002: loss of £1.16m)

The Group's cash position was £1.80m as at 30th June 2003 compared to £2.2m as
at 30th June 2002.

Business Review

An Early Adopter Programme for DVD-Extra Studio(TM) was launched in the first part
of the year and there has been significant interest from many organisations in
joining this programme. The Group has selected 30 organisations from the film
and video industry, multimedia and education markets in order to ensure that the
first commercial release is of a high quality and includes features that meet
with customer requirements. The feedback so far is highly encouraging in terms
of the permitted applications, the stability of the software and the features
incorporated. It is clear that consumer demand for richer interactive content is
something the major entertainment publishers are keen to exploit.

An exclusive licensing agreement with Universal Pictures was signed in May 2003,
for the supply of interactive DVD games based on the 'Who Wants To Be A
Millionaire?' TV show. The UK and French products have been completed and
delivered on time and will be published during the second half. We are hoping to
be able to announce further product agreements during the second half of 2003.

Four further patents were filed during the first half in the UK, USA and in
multi territories under the Patent Cooperation Treaty. These cover technologies
related to DVD-Extra and are applications that allow DVD Video players to behave
more like multimedia PCs. They include a method to control access to DVD-Video
content thereby making the DVD more difficult to copy illegally.

We have continued to develop our portfolio of products in the video games market
and aim to publish at least 24 products on GameBoy Advance, PlayStation 2,
PSOne, PC and Gamecube in over 5 territories during the second half of 2003.


John Barnes                                             Ian Stewart
Chairman                                                Chief Executive Officer



Consolidated unaudited Profit and Loss account

                                            6 months     6 months         Year
                                               ended        ended        ended
                                           30-Jun-03    30-Jun-02    31-Dec-02
                                           Unaudited    Unaudited      Audited
                                               £'000        £'000        £'000

Turnover                                       1,296          274        1,882

Net operating expenses (excluding             (2,027)      (1,250)      (3,756)
depreciation)
                                           ____________________________________
Loss before interest, tax, depreciation,        (731)        (976)      (1,874)
amortisation and exceptional items

Other operating expenses
- depreciation                                   (55)         (45)         (98)
- amortisation of goodwill                      (225)        (179)        (403)

                                           ____________________________________
Operating loss                                (1,011)      (1,200)      (2,375)

Investment income                                 16           38           35

                                           ____________________________________

Loss on ordinary activities before              (995)      (1,162)      (2,340)
taxation

Taxation                                           -            -          134

                                           ____________________________________
Retained loss for the period                    (995)      (1,162)      (2,206)
                                           ====================================

Loss per ordinary share                        (0.61p)       (0.8p)      (1.46p)
                                           ____________________________________



Consolidated unaudited Balance Sheet

                                            6 months     6 months         Year
                                               ended        ended        ended
                                           30-Jun-03    30-Jun-02    31-Dec-02
                                           Unaudited    Unaudited      Audited
                                               £'000        £'000        £'000

Fixed Assets
    Intangible                                 3,540        4,156        3,756
    Tangible                                     168          234          210
    Other investments                            228          228          228
                                           ____________________________________
                                               3,936        4,618        4,194
                                           ____________________________________

Current Assets
    Stock                                        229          244          363
    Debtors                                      905          534        1,435
    Cash at bank and in hand                   1,796        2,162        1,306
                                           ____________________________________

                                               2,930        2,940        3,104

Creditors : amounts falling due within        (1,760)      (1,627)      (2,595)
one year

                                           ____________________________________
Net current assets                             1,170        1,313          509
                                           ____________________________________

Total assets less current liabilities          5,106        5,931        4,703

Creditors : amounts falling due after           (757)        (757)        (757)
more than one year
                                           ____________________________________
Total net assets                               4,349        5,174        3,946
                                           ====================================

Financed By
    Share capital                                435          315          315
    Share premium account                     13,239       11,960       11,961
    Other reserves                             8,598        8,598        8,598
    Profit & loss account                    (17,923)     (15,699)     (16,928)

                                           ____________________________________
Equity Shareholders' Funds                     4,349        5,174        3,946
                                           ====================================




Consolidated unaudited Cash Flow Statement

                                            6 months     6 months         Year
                                               ended        ended        ended
                                           30-Jun-03    30-Jun-02    31-Dec-02
                                           Unaudited    Unaudited      Audited
                                               £'000        £'000        £'000

Net cash outflow from operating                 (902)        (886)      (2,583)
activities

Returns on investment and servicing of            16           38           66
finance
Capital expenditure and financial                (22)         (31)         (45)
investment
Acquisitions and disposals                         -         (282)          (6)

                                           ____________________________________
Net cash inflow before financing                (908)      (1,161)      (2,568)

Financing                                      1,398            -          551

                                           ____________________________________
                                                 490       (1,161)      (2,017)
                                           ====================================


Reconciliation of operating loss to net cash flow from operating activities

Operating loss                                (1,011)      (1,200)      (2,375)
Depreciation charge                               55           45           98
Loss on disposal of fixed assets                   -           (7)           -
Decrease / (Increase) in stock                   134         (244)        (363)
Decrease / (Increase) in debtors                 530         (390)        (698)
(Decrease) / Increase in creditors              (835)         731          352
Goodwill amortisation                            225          179          403
                                           ____________________________________
Net cash outflow from operating                 (902)        (886)      (2,583)
activities
                                           ====================================

Analysis of changes in cash and cash
equivalents

Opening balance                                1,306        3,323        3,323
Net cash inflows / (outflows)                    490       (1,161)      (2,017)

Closing balance                                1,796        2,162        1,306
                                           ____________________________________
Analysed as follows
Cash at bank and in hand                       1,796        2,162        1,306
                                           ====================================


Notes

Board Approval

The interim accounts were approved by the board of directors on 15th August,
2003

Nature of accounts

The financial information for the six months ended 30 June 2003 and 30 June 2002
is unaudited and does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.  The information has been prepared on the
basis of accounting policies used in the financial statements to 31 December
2002.

The financial information for the year ended 31 December 2002 is extracted from
the audited accounts for that period.  The auditors' report on those accounts
was unqualified and did not contain a statement under Section 237(2) or (3) of
the Companies Act 1985.

Share issue

60,000,000 new ordinary shares of 0.2p each of the Company at a price of 2.5p
per share were placed with new institutional investors on 3rd June 2003.

The total number of ordinary shares in issue following the placing is
217,770,126

Earnings per share

Earnings per share is calculated based upon the loss on ordinary activities
after tax for each period divided by the weighted average number of shares in
issue during each period being 163,826,332 (2002: 145,432,946).

Information on fully diluted earnings per share has not been presented as the
company recorded a loss after tax in each of the relevant periods and
accordingly the exercise of options would not result in further earnings
dilution for shareholders.

Gains and losses

The company had no recognised gains or losses in the current period other than
the loss for the period.

Further Copies

Copies of this announcement and the Interim Report for the six months ended 30
June 2003 will be available, free of charge, for a period of one month from the
Company's Nominated Adviser and Broker, Noble & Company Limited, 1 Frederick's
Place, London, EC2R 8AB, Tel: [phone] or from the registered office of the
Company at Parkhead House, 26 Carver Street, Sheffield, S1 4FS.



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