Interim Results

Zoo Digital Group PLC
14 December 2005



Embargoed until 7.00am                                        14th December 2005


                             ZOO DIGITAL GROUP PLC
                             ('ZOO' or 'the Group')

            INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2005

ZOO Digital Group plc ('ZOO' or 'the Group') today announces its results for the 
six months ended 30 September 2005.

Financial Highlights

• Group turnover increased by 48% to £4.4 million (six months to 30 June 2004:
  £3.0 million)

• Loss before interest, tax, depreciation and amortisation of £2.0m (six months 
  to 30 June 2004: Loss of £1.0 million)

• On track to reach Group profitability by financial year end

• Successful placing with institutions to raise £3 million (net of expenses)

Operational Highlights

• First 'Menu Regionalisation' contract signed with major Hollywood studio

• Who Wants To Be A Millionaire - Family Picture Edition', 'Wallace & Gromit'
  and 'Telly Addicts' interactive DVD games completed and delivered to Universal
  Pictures. Universal will release these games into eight territories throughout
  the second half of the year

• First interactive DVD completed for the US market - 'Wallace & Gromit' published
  by Snap TV

• Management focus on US market and opportunities that Hollywood presents

Commenting on the results, Ian Stewart, CEO of ZOO Digital Group plc, said:

'The first six months of this year have seen a frenetic level of activity. We
have signed our first deal with a major Hollywood studio, developed and tested
the technology across a number of new product areas, published a large number of
games and interactive DVDs for the Christmas market and broken into the US
consumer market. We expect that the commercial results of this activity will be
clearly demonstrated in the full year.'

Enquiries

Ian Stewart                                         James Chandler/Helen Thomas
CEO, ZOO Digital Group plc                          Weber Shandwick
0114 241 3700                                       020 7067 0747

John Llewellyn-Lloyd
Noble & Company Limited
020 7763 2200


CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT

Introduction

The first half of this year has marked another positive step change in ZOO's
development. The Group has firmly established a foothold in the US market
through its first major contract with a Hollywood studio and its first published
interactive DVD with Snap TV. Detailed discussions continue with other large
entertainment corporates and management is focused on delivering further
revenues in this market throughout the rest of the financial year.

In addition, ZOO has produced its first 'non-quiz' interactive DVD ('iDVD') game
as well as a host of interactive titles for the Christmas period. Excitingly,
the retail industry, driven by consumer demand and an 800% increase in iDVD
titles, has recognised the importance of iDVD's as an entertainment genre and is
now allocating dedicated shelf space separate from space allocated to DVD film
titles.

Overall, applications for DVD-EXTRA, ZOO's unique DVD authoring software, have
progressed and diversified throughout the first half of this year. This is in
parallel with a growing demand for iDVD titles both from consumers and the
entertainment industry which wants to match increasing consumer demand with
innovative and efficient production techniques.

Financial Review

The Group increased turnover by 48% to £4.4 million for the period to 30
September 2005 (six months to 30 June 2004: £3.0m) and made a loss before
interest, tax and depreciation of £2.0 million (six months to 30 June 2004: loss
of £1.0 million). The increase in loss is primarily attributable to continued
investment in the DVD-EXTRA technology whilst revenues are expected from
technology licensing over the second half.

Historically, the Group experiences a much stronger turnover in the second half
of the year, driven by Christmas trading in ZOO's publishing division ZDPL In
addition, this year there is an especially strong release schedule in the final
quarter of the financial year. ZDPL moved into profitability last year and is
expected to continue its progress in driving profitable revenue growth. There is
also an expectation that further opportunities with regard to DVD production
will be realised over the second half of the year and therefore ZOO expects that
the Group as a whole will reach profitability in this financial year.

ZOOtech Ltd

ZOOtech, the technology division of the Group, continues to focus its activities
on licensing its innovative proprietary technology and firmly believes this
technology can revolutionise the video production industry. ZOOtech's current
products deliver substantial time and cost savings for DVD title producers and
its' market focus over the period has been in two areas:

Home Video Market
Those companies involved in the production and publishing of home video titles,
currently on DVD-Video. The technology products to date are DVD-EXTRA STUDIO and
the Regionalisation Utility for the efficient production of localised DVD menus.
Customers include a major Hollywood studio, Technicolor Creative Services,
Ascent Media Corporation and Comchoice. This technology allows radical process
re-engineering, enabling automation of many DVD production processes that
currently depend upon manual labour. ZOOtech's current products deliver
substantial time and cost savings for DVD title producers and the Group firmly
believes this technology can revolutionise the video production industry.

Interactive DVD
Those companies involved in the production and publishing of interactive
DVD-Video titles, to which ZOOtech licenses its DVD-EXTRA STUDIO product. This
software is provided to production houses and multimedia developers. ZOOtech
generally enters into publishing agreements with those companies who
commercialise such products. Companies such as EMI, Universal Pictures, Granada
Media, Snap TV, IMG/TWI and National Geographic have either released or are in
the process of releasing interactive DVD titles in multiple territories. These
include 'Who Wants To Be A Millionaire', 'Madagascar' , 'Wallace & Gromit DVD
Game', 'Now That's What I Call A Music Quiz', 'FA Premier League Super Quiz',
'Beat the Intro', 'Test the Nation' and 'NCAA Football Trivia Challenge'.


ZOOtech's main development project is the 'Post-production Hub', which is
intended to overcome the inherent inefficiencies in the currently decentralised
process of video production by standardising and centralising operations. The
first element of this hub is ZOOtech's 'Regionalisation Utility' which enables
studios to produce titles in many languages for multiple territories in a
fraction of the time and cost of the conventional approach. This results in
typical savings of multiple millions of dollars for Hollywood studios. One major
studio has already taken this product and testing is well under way with other
organisations.

The second element of the hub is a project that encompasses an automated
authoring system to allow efficient production of film titles across multiple
platforms and formats, including DVD-Video, UMD (used by Playstation Portable),
HD DVD, Blu-ray Disc and some 'on demand' formats. Again licensees will benefit
from large annual time and cost savings as well as greater efficiencies and
creative capacity. Prototypes are currently being tested by major organisations
and the Group estimates that this process could be used on a large percentage of
all film DVDs produced.

The North American market clearly offers ZOOtech many opportunities, not least
the potential for relatively large individual deals with film studios and
entertainment corporates and technology development partnerships. Consequently,
ZOOtech is looking to develop its US business and has focused greater resources
and management time in driving business development in this area. In particular
Robert Deri (Chief Financial Officer) and Dr Stuart Green (Chief Technical
Officer) have been working more closely on opportunities that the US presents,
concentrating on deepening existing relationships with the major organisations
and working closely with customers regarding process improvement, reduction of
client in-house production budgets and software solutions.

ZOO Digital Publishing Limited ('ZDPL')

ZDPL's activities have led to the creation of a new game genre - the interactive
DVD and DVD Game. In the UK retailers such as HMV, Virgin, WHSmith and Borders
are, for the first time, dedicating point-of sale areas and actively promoting
this rapidly growing product category. ZDPL has pioneered this development and
completed four titles during the period, which are being published by Universal
Pictures in a number of territories including UK, France, Germany and Japan and
supported by television advertising campaigns. In addition, as previously
reported in October, ZDPL has for the first time broken into the North American
market through a partnership with Los Angeles based games producer Snap TV to
publish ZOO's interactive DVD game 'Wallace & Gromit Curse of the Were Rabbit'.
This game is also the first non-quiz based product to enter the market and
continues ZOO's history of setting new standards of innovation. Such innovation
has not gone unnoticed and the Group was delighted to win three awards in the
recent DVD Association Excellence Awards ceremony in New York City with awards
for three of its individual titles.

In the Video Games business ZDPL has, during the period, been focussed on
delivering its strategy to improve the quality of new games titles that it
publishes with a focus on fewer, higher potential products. In the first six
months ZDPL have published a total of 38 new games across a variety of platforms
including PC, PS2, Xbox, Nintendo Gameboy Advance, Nintendo DS and Sony PSP and
has acquired a number of key titles for release in the final quarter of the
financial year. These include 'Ty3: Night of the Quinken', 'LA Rush', 'Narc',
'Seaworld Adventure Parks Tycoon 3D' and 'American Chopper - The Full Throttle'.

ZDPL is therefore confident that it can publish attractive and popular titles
that will appeal to consumers. However, ZOO remains conservative in its outlook
for sales during the second half given the current uncertainties in the retail
market.

Outlook

The last six months have seen the Group continue to grow and progress its key
activities. The next six months will see us build further on this by delivering
solid revenues on the publishing side and further exploiting our DVD authoring
technology. Overall both subsidiaries have continued to progress strongly as the
group continues to focus on areas where near-term revenues and the large and
accessible market opportunities exist.

We would like to take this opportunity, on behalf of the Board, to thank all
ZOO's staff for their continued hard work and commitment over the last six
months.

M J Barnes
Chairman

I C Stewart
Chief Executive Officer

14 December 2005


ZOO DIGITAL GROUP PLC
CONSOLIDATED UNAUDITED PROFIT & LOSS ACCOUNT
INTERIM RESULTS TO 30 SEPTEMBER 2005

                              6 months to       6 months to       15 months to
                                30-Sep-05         30-Jun-04          31-Mar-05
                                Unaudited         Unaudited            Audited
                                    £'000             £'000              £'000

Turnover                            4,395             3,012             12,669

Cost of sales                      (2,911)           (1,808)            (7,611)
                             --------------------------------------------------
Gross profit                        1,484             1,204              5,058

Other operating expenses           (3,508)           (2,203)            (6,647)
                             --------------------------------------------------
Loss before interest, tax,
 depreciation and amortisation     (2,024)             (999)            (1,589)

Depreciation                          (82)              (57)              (155)
Amortisation of goodwill             (241)             (234)              (593)
                             --------------------------------------------------
Operating loss                     (2,347)           (1,290)            (2,337)

Interest payable                      (50)              (15)               (42)
Investment income                      11                79                 99
                             --------------------------------------------------

Loss before tax                    (2,386)           (1,226)            (2,280)

Taxation                                -                 -                 53
                             --------------------------------------------------
Retained loss                      (2,386)           (1,226)            (2,227)
                             ==================================================

Loss per ordinary share             (0.79p)           (0.44p)            (0.80p)

ZOO DIGITAL GROUP PLC
CONSOLIDATED UNAUDITED BALANCE SHEET
INTERIM RESULTS TO 30 SEPTEMBER 2005

                               6 months to      6 months to       15 months to
                                 30-Sep-05        30-Jun-04          31-Mar-05
                                 Unaudited        Unaudited            Audited
                                     £'000            £'000              £'000

Fixed Assets
   Tangible                            405              225                377
   Intangible                        3,127            3,391              3,351
                             --------------------------------------------------
                                     3,532            3,616              3,728

Current Assets
   Stock                             1,005              357                903
   Debtors                           6,284            3,198              5,937
   Cash                                  -            2,974                  -
                             --------------------------------------------------
                                     7,289            6,529              6,840

Current Liabilities
Creditors                           (3,263)          (2,225)            (3,630)

Net current assets                   4,027            4,304              3,210

Long term liabilities                    -                -                  -
                             --------------------------------------------------
                                     7,558            7,920              6,938
                             ==================================================

Equity
   Called up share capital             635              559                559
   Share premium                    21,649           18,700             18,719
   Other reserves                    8,598            8,598              8,598
   Reserves                        (22,995)         (19,608)           (20,609)
   Interest in own shares             (329)            (329)              (329)
                             --------------------------------------------------
                                     7,558            7,920              6,938
                             ==================================================

ZOO DIGITAL GROUP PLC
CONSOLIDATED UNAUDITED CASH FLOW STATEMENT
INTERIM RESULTS TO 30 SEPTEMBER 2005

                                      6 months to   6 months to   15 months to
                                        30-Sep-05     30-Jun-04      31-Mar-05
                                        Unaudited     Unaudited        Audited
                                            £'000         £'000          £'000
Net cash outflow from operating
 activities                                (3,230)       (1,156)        (4,302)

Returns on investment and servicing
 of finance                                   (39)           64             57
Capital expenditure and financial
 investment                                  (127)         (538)        (1,107)
                             --------------------------------------------------
Net cash outflow before financing          (3,396)       (1,630)        (5,352)

Financing                                   3,006          (847)          (828)
                             --------------------------------------------------
(Decrease) / increase in cash in
 the period                                  (390)       (2,477)        (6,180)
                                          =========      ========      =========

Reconciliation of operating loss to net cash flow from operating activities

Operating loss                             (2,347)       (1,290)        (2,337)
Depreciation charge                            82            57            155
Goodwill amortisation                         241           234            593
(Increase) / Decrease in stock               (102)           37           (509)
(Increase) / Decrease in debtors             (347)          (91)        (2,777)
(Decrease) / Increase in creditors           (757)         (103)           573
                           ----------------------------------------------------
Net cash outflow from operating
 activities                                (3,230)       (1,156)        (4,302)
                             ==================================================

Analysis of changes in cash and cash equivalents

(Decrease) / increase in cash in
 the period                                  (390)       (2,477)        (6,180)
Cash outflow from decrease in debt              -           858            858
                           ----------------------------------------------------
                                             (390)       (1,619)        (5,322)
Net (debt)/ funds at start of
 period                                      (729)        4,593          4,593
                           ----------------------------------------------------
Net (liabilities) / funds at end of
 period                                    (1,119)        2,974           (729)
                             ==================================================

Analysed as follows
Bank overdraft                             (1,119)            -           (729)
Cash at bank in hand                            -         2,974              -
                                         ----------    ----------      ---------
                                           (1,119)        2,974           (729)
                             ==================================================


NOTES

Board approval

The interim accounts were approved by the board of directors on 13th December
2005.

Nature of accounts

The financial information for the six months ended 30 September 2005 and 30 June
2004 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 March
2005.

The financial information for the period ended 31 March 2005 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.

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 300,599,003 (June 2004: 279,058,585; March 2005:
279,333,785).

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
September 2005 will be available, free of charge, for a period of one month from
the Company's Nominated Adviser and Broker, Noble & Company Limited, 120 Old
Broad Street, London, EC2N 1AR, Tel: [phone] or from the registered office
of the Company at 20 Furnival Street, Sheffield, S1 4QT.



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