Final Results

Zoo Digital Group PLC

30 July 2026

 

30 July 2026

ZOO DIGITAL GROUP PLC

("ZOO", the "Group" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2026

Restructuring completed, profitability materially improved and return to growth underway

ZOO Digital Group plc (AIM: ZOO), the tech-enabled localisation and digital media services partner to the global media and entertainment industry, announces its audited financial results for the year ended 31 March 2026. The business exited FY26 with improved profitability, stronger cash generation and a leaner operating model, positioning the Group for a return to growth in FY27 and beyond.

Stuart Green, CEO of ZOO, commented:

"FY26 has been a transformational year for ZOO. We completed the restructuring programme, improved profitability and strengthened cash generation, while maintaining our position as a trusted partner to the world's leading media and entertainment companies.

"Demand for faster, high-quality technology-enabled localisation solutions continues to grow and our reshaped business is well positioned to continue to capture this opportunity. 

"With a stronger rightsized financial platform, improving customer activity and recent contract wins, we enter FY27 focused on returning the business to profitable growth."

	FY26	FY25	Change
Revenue	$42.3 million	$49.6 million	(14.7%)
Adjusted EBITDA1	$4.0 million	$1.1 million	260%
Cash EBITDA2	$0.4 million	$(2.7) million	-
Operating loss	$1.6 million	$6.5 million	75%
Reported loss before tax	$2.3 million	$8.3 million	72%
Gross cash at year-end	$3.2 million	$2.7 million	18.5%

Financial Highlights

·      Improved profitability during FY26, despite lower revenues, due to completion of the restructure and cost actions taken during the period.

·      Improved margins from leaner, more efficient operating model, delivering 42% gross profit margin (FY25: 36%).

·      Adjusted EBITDA¹ after restructuring costs increased to $4.0 million (FY25: $1.1 million).

·      Restructuring programme completed, creating a rightsized operating model and improved profitability.

·      Cash EBITDA² of $0.4 million (FY25: $2.7 million loss) reflects improved operating performance.

·      Cash of $3.6 million (FY25: $2.7 million), reflecting strong cash management, the use of the invoice financing facilities and the reduction of creditor balances.

·      $1.4 million (FY25: $0.0 million) drawn on the US invoice financing facility against a total facility of $5.0 million (FY25: $3.0 million), utilised to proactively reduce aged creditors. The £2.0 million UK invoice financing facility was unutilised at the yearend (as per FY25).

·      Current liabilities reduced to $14.3 million (FY25: $18.3 million).

Operational Highlights

·      New framework agreements to provide localisation, media and end-to-end services across two customers, improving revenue diversification while continuing to serve all major studios.

·      Achieved external quality score³ of 99.3% (FY25: 98.4%), demonstrating high customer satisfaction and ZOO's position as a strategic partner.

·      Successfully launched premium Fast Track service for live and near-live streamed events, reducing turnaround times and supporting higher margin revenue.

o  Delivered dubbing in 24 hours and subtitling in 3 hours, a dramatic reduction over typical industry timelines. 

o  Completed several high-profile projects for a global streaming service.

·      Further strengthened position as an AI-enabled quality end-to-end vendor of localisation and media services through integrating AI across workflows alongside high-value human expertise to maintain premium quality. 

o  Customers are seeking trusted localisation vendors such as ZOO that embrace technology within a secure framework combined with specialist expertise.

Current Trading and Outlook

·      Strong trading in FY27Q1 marks an encouraging start to our new financial year.

·      This gives the Board confidence in delivering a return to revenue growth and profit progression during the year.

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Notes:

¹  Adjusted EBITDA is EBITDA with the impact of share-based payments removed.

²  Cash EBITDA is Adjusted EBITDA less spend on capitalised development and property costs. This metric is more closely aligned with the underlying cash flow of the business.

³  External Quality Score is weighted average of quality scores given by customers on our work delivered in the period. In FY26 we received quality scores on work that accounted for 55% of revenue (FY25: 59%).

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Analyst and Investor Presentations

Stuart Green, Chief Executive Officer, and Robert Pursell, Chief Financial Officer, will host an online presentation for sell-side equity analysts, followed by Q&A, at 10:00 BST today. Analysts wishing to join should register their interest by contacting: [e-mail].

Management will hold an online presentation for private investors at 17:00 BST today. The presentation will be hosted on the Investor Meet Company platform and is open to all existing and potential shareholders. Questions can be submitted pre-event via the Investor Meet Company dashboard, or at any time during the live presentation. A recording of the webinar will be made available via the Company's website afterwards.

Investors can register for the presentation by following ZOO Digital via the following link:

https://www.investormeetcompany.com/zoo-digital-group-plc/register-investor

A copy of the presentation and recording of the webinar will be made available via the Company's website at www.zoodigital.com.

For further information, please contact:

ZOO Digital Group plc	[phone]
Stuart Green - Chief Executive Officer
Robert Pursell - Chief Financial Officer
Canaccord Genuity (Nominated Adviser and Broker)	[phone]
Simon Bridges / Harry Gooden / Andrew Potts / George Grainger
Vigo Consulting (Financial PR)	[phone]
Tim McCall / Rozi Morris / Joe Quinlan	[e-mail]

About ZOO Digital Group plc:

ZOO Digital partners with major Hollywood studios and streaming services to tell their stories to audiences around the world.

The Group's localisation and digital media services allow customers to globalise content across different territories, languages and distribution platforms, extending its reach and profitability.

Deploying proprietary technology platforms and 12,000+ freelancers, ZOO offers end-to-end dubbing, subtitling and captioning, metadata creation and localisation, mastering, artwork creation and localisation, and media processing.

ZOO has frameworks in place with all major Hollywood studios and streaming services, helping them to capitalise on new opportunities in a fast-paced industry. Customers include Disney, NBCUniversal, Netflix and Paramount Global.

Founded in 2001, the Group has a global presence with dedicated hubs in Los Angeles, London, Dubai, Turkey, South Korea, India, Spain, Italy and Germany as well as a development and production centre in Sheffield, UK.

www.zoodigital.com

CHAIR'S STATEMENT

I am delighted to present my first statement as Chair of the Board of ZOO following my appointment in May 2026 and look forward to continuing to support the Group's further growth and success.

Overview

FY26 was an important year for ZOO as we completed the strategic reset of the business and established a more optimised platform to enable the business to deliver profits and positive cash generation. The Group's operations have been reshaped, the cost base rightsized and the business is well positioned to capitalise on the opportunities we have identified in an evolving industry.

At the start of the year, the Board set one clear priority: demonstrate profitable, cash-generative operations in a market that has faced unprecedented challenges and undergone significant transformation in recent times. We have generated cash and delivered a significant improvement in EBITDA, giving us confidence that the Group is on the right track again to deliver profitable growth. 

We are pleased to report that gross profit margin increased to 42% in the period, up from 36% in the prior year which, together with a $5.5 million reduction in administrative expenses, delivered an increase in adjusted EBITDA to $4.0 million compared with $1.1 million in FY25.  This in turn resulted in cash inflow from operating activities of $3.5 million, up from $1.5 million in FY25. Cash and cash equivalents held at the end of FY26 increased to $3.6 million from $2.7 million in FY25. 

Building a right-sized platform

Our financial performance reflects a leaner, more flexible organisation. Over the last two years, the Group's annual fixed costs have been reduced by $14.4 million as the cost base was rightsized, refocusing on our asset-light, scalable model. In addition, we have made structural efficiencies by fully integrating our international operations, migrating certain functions to the Group's new facility in Chennai and embedding AI across our workflows.

With these cost saving initiatives now complete, we believe ZOO has a strong foundation to navigate a changing landscape. While the film and television entertainment industry evolves, the need for high-quality, localised content remains integral to our customers' international strategies. Market conditions are more stable following a period of prolonged disruption and several major studios are now operating profitable streaming services. We will continue to evolve our own operating model on an ongoing basis as the industry develops further, and in line with our customers' requirements for the future.

Capitalising on market opportunities

We are now living in the streaming era. More content than ever is being made by streaming platforms as they grow their subscriber bases around the world and audiences continue to gravitate to these platforms for more of their media and content consumption. Some of these streaming platforms are investing in live and near-live content, including sporting events, entertainment formats and episodic programming. A key difference they have compared to linear television is the scale and reach to broadcast instantaneously to international audiences around the world.

Our premium Fast Track service is a clear example of how we are responding through innovation. By dramatically compressing subtitling and dubbing timelines for live and near-live content, Fast Track addresses our customers' demands for fast and flexible delivery, while also preserving the quality standards that are essential. We continue to blend AI intelligently and responsibly with our human expertise and oversight to deliver a premium service on a global scale. This shows the value of ZOO's technology-led, end-to-end proposition and gives us a competitive advantage over our peers.

Board and people

On 13 August 2025 our Chief Financial Officer of seven years, Phillip Blundell, stepped down from the Board and we welcomed Rob Pursell to the Company. I would like to extend our thanks to Phill for his contribution to ZOO during his tenure and to Rob for his work during FY26 and his first annual report for ZOO.

The completion of the cost savings initiatives and associated restructuring presented a natural opportunity to refresh the Board. I would like to thank on behalf of all of the Board Gillian Wilmot who stepped down as Chair in May 2026 after nearly seven years. I would also like to thank Mickey Kalifa as he will be stepping down as Non-Executive Director after the FY26 AGM. Mickey will be succeeded as Chair of the Audit Committee by Alan Newman, who joined the Board in May 2026, to whom the Board extends its warm welcome. A search for an additional independent director and Remuneration Committee Chair Designate is currently in progress and the Board is targeting to announce this appointment shortly after the AGM.

On behalf of the Board, I would like to thank our shareholders for their continued support. I would also like to pay particular tribute to our staff and freelancer network around the world. I recognise that it has been a challenging few years and we have taken difficult decisions to restructure the business. Throughout this period, they have displayed outstanding professionalism and dedication to deliver for our customers and maintain our excellent external quality scores. 

Looking ahead

As a technology-first disruptor in the industry, a key pillar of ZOO's strategic plan has always been to deliver competitive advantage through proprietary software technology that automates and scales traditional human processes. This remains a core competence to this day, with the integration of AI only strengthening ZOO, enhancing its proposition and differentiating ZOO from its peers.

There is much to give the Board reasons to be optimistic for the future: our enhanced and rightsized operating platform is now in place; there are exciting developments in the industry creating demand for our accelerated and Fast Track services; we have integrated AI with our 'human in the loop' expertise and oversight; and we have recently won new customers and further projects from existing customer relationships. We believe that we have turned a corner, the business is financially rightsized, and we are well positioned to capitalise on the new opportunities in our market.

Nathalie Schwarz
Chair

STRATEGIC REPORT

Introduction

In FY26, we completed the planned reshaping of the Group's platform to enable the business to deliver profits and positive cash generation even in a changing market. The business now has a proposition aligned with the future of the industry, a more efficient operating structure and a rightsized cost base. These changes resulted in a financial performance in line with market expectations, with materially higher margins, improved profitability and strong cash generation. 

As market conditions continued to stabilise, the Group generated EBITDA adjusted for share-based payments ("Adjusted EBITDA") of $4.0 million (FY25: $1.1 million) on revenue of $42.3 million (FY25: $49.6 million). These results support the Board's decision to right size the Group's operations, generating higher EBITDA from a lower revenue base as the industry recovers, highlighting the value of the leaner and more flexible model we have built. This is also reflected in the cashflows of the Group with improved cash inflow from operating activities of $3.5 million (FY25: $1.1 million).

An evolving market is creating new opportunities, and these are playing to ZOO's strengths. As customers increasingly demand high-quality services at faster speeds in new formats, we believe ZOO's technology-led, end-to-end model gives us a competitive advantage over our peers. This is reflected in the new business the Group has won over recent months as customer Request for Proposals (RFP) activity has accelerated, an encouraging leading indicator of the market's recovery.

Market overview

Streaming drives global content investment

Audiences continue to migrate from traditional broadcast television to streaming platforms, a structural shift that is set to continue. According to the PwC Global Entertainment & Media Outlook of June 2026, Global Over-the-Top (OTT) subscriber numbers and streaming revenues are projected to grow to 2030, albeit at a more measured pace as the market reaches maturity in developed western economies. Increasingly, growth is being driven by emerging markets, ensuring that more content than ever is being produced with global audiences in mind and supporting demand for localisation services.

The increasing dominance of streaming is reflected in the breakdown of global content investment. According to a January 2026 forecast by Ampere Analysis, streaming platforms overtook local commercial broadcasters in overall contribution to content spend for the first time in 2025, and this divergence is expected to widen further in 2026. The research house forecasts a 2% increase in global content spending to $255 billion, up from $245 billion in 2025. Within this, content investment from streaming platforms is expected to grow by 6% in 2026, underscoring the structural shift towards streaming made possible by increased subscription and advertising revenue. This is also consistent with the higher levels of RFP activity that ZOO has experienced over recent months. 

Outside the North American market, Indian media companies and streaming platforms are driving content spend in the Asia-Pacific (APAC) region. Over the last five years, India has grown its share of APAC content spend from 8% of $20.4 billion to an estimated 12% of $22 billion in 2026 as offerings such as crime dramas and family content garnered strong demand, particularly from the Middle East and US. Similarly, according to AlixPartners' "2026 Media & Entertainment Industry Predictions Report", the international popularity of Turkish drama series has made it one of the top three series-exporting countries, behind the US and UK, reaching 750 million viewers in over 170 countries. Over recent years, ZOO has established regional hubs in these key markets, providing direct access to local talent and a platform for business development. 

Importantly, the streaming industry is sustainable at current levels of content spend, reflecting the substantial changes that have taken place across the sector since 2023. The disruption driven by the Hollywood strikes and recalibration of content budgets is well documented. Today, most global streaming platforms have established profitable operations and are moving from cost centres to income generators. Localisation plays an important role in this evolution, enabling content investment to be amortised across global audiences and maximising return on investment.

The content investment by streamers is being increasingly recognised within the industry in terms of the quality of programming that it is delivering. In categories ranging from the Emmys to the Oscars, streamers have captured a significant number of top accolades in recent years, consistently pushing traditional legacy broadcast networks out of the running.

The increased focus on profitability has also raised the appeal of licensed content, which can be less capital intensive and lower risk than commissioning new original titles. Licensed content must often be reformatted, a specialised capability ZOO delivers through its Media Services offering. While licensed content can also require localisation services, this tends to be weighted towards subtitling since licensees are unlikely to fund the cost of dubbing third party programmes.

Faster turnaround requirements

There is a clear and accelerating trend towards faster project turnaround times. Customers are increasingly seeking to reduce the time-to-market, whether for competitive reasons or because they are working with inherently time-sensitive content formats such as live and near-live events or episodic programming with short turnaround release schedules. In this respect, streaming is becoming the new television, expanding into content formats long associated with traditional linear broadcast models.

One such example is live sports. With their large real-time audiences, sports broadcasting is seen as a powerful tool for subscriber growth, retention and advertising revenue. Netflix and Amazon are particularly active in this part of the market, holding the exclusive broadcast rights for the NFL's Christmas day games and Thursday Night Football respectively. In addition, Netflix has expanded into boxing with a series of high-profile matches, building on the success of Jake Paul vs Mike Tyson in 2024, which became the most streamed sporting event in history. It also holds exclusive broadcast rights to WWE's weekly shows and premium live events in more than 90 countries under a deal extending to 2035.

Streaming platforms are also testing a range of light entertainment formats, current affairs programmes, chat shows and video podcasts. Consumer appetite and the time-sensitive nature of this content is driving demand for faster localisation to reduce time-to-market. Microdramas represent another emerging format gaining traction. These short-form, mobile-first series are typically two to three minutes per episode with sharp narrative hooks optimised for sharing on social media. Omdia forecasts global revenues for micro dramas will reach $14 billion in 2026, with demand growing rapidly across the US, UK, Japan, South Korea, Thailand and other international markets beyond the format's dominant origin market of China.

Review of operations

The comparator period includes a backlog of work from the Hollywood strikes which came through in FY25H1. The Board therefore regards FY26 as representative of a more normalised trading environment, reflecting an industry that has stabilised but at a low ebb following the disruption of recent years. 

KPI	FY26	FY25	Comments
Financial
Revenue	$42.3 million	$49.6 million	Decline due primarily to fall in demand for dubbing while customer content strategies were in transition.
Adjusted EBITDA margin	9.4%	2.2%	Margin improvement due to cost reduction measures that were taken during the period and the increased mix of higher margin media services revenue.
Cash EBITDA	$447k	($2.4 million)	Margin improvements and cash reduction.
OPEX as % of revenue	45.7%	49.4%	Achieved improved operational gearing on a lower revenue base as a result of reductions of fixed cost.
Operating (loss) margin	(3.8)%	(13.1)%	The improvement in the operating margin is due to the completion of the reorganisation of the business giving a  reduced cost base
Operational
External quality score	99.3%	98.4%	Weighted average of quality scores given by customers on our work delivered in the period. In FY26 we received quality scores on work that accounted for 55% of revenue (FY25: 59%).

Media localisation

Media Localisation generated revenue of $24.2 million compared to $30.3 million in FY25, with the year-on-year movement entirely attributable to lower demand for dubbing. This reflects a reduction in the throughput of original content across major streaming platforms following changes in their strategy, and buyers consolidating lower levels of spend with fewer vendors.

By the end of FY26, the Group had begun to receive a regular pipeline of orders for its faster turnaround services. While still at a relatively early stage as customers experiment with formats, brands and distribution channels, this category of work has been growing quarter on quarter and is expected to continue. A proportion of these projects fall under ZOO's premium Fast Track proposition, which has been proven to dramatically compress timescales for content requiring ultra-accelerated turnaround and now accounts for around 10% of the Group's revenues. The Group has successfully delivered dubbing in as little as 24 hours, compared to typical industry timelines of three to four weeks, and subtitling in as little as three hours, against an industry standard of one to two weeks. 

Fast Track is just the latest example of the innovation that has long defined ZOO. It is a premium service made possible by the Group's proprietary cloud-based platform, global reach and flexible freelancer model, which together provide capabilities that cannot easily be replicated within traditional, studio-based workflows. The solution has been developed, trialled and refined in close collaboration with our customers over the last 18 months, including some of the most high-profile sporting events watched live by over a hundred million subscribers around the world. That we have achieved this while maintaining industry-leading quality metrics is testament to the capability of the Group's technology and teams that provide vital human oversight throughout the process. Demand for this service extends beyond localisation to encompass ZOO's full end-to-end offering, including Media Services.

Media services 

Media services generated revenue of $18.1 million compared to $19.3 million in FY25, reflecting in part the subdued demand for localisation which typically brings complementary demand for media services. This was partially offset by a favourable shift in mix towards licensed content, which tends to drive proportionally greater demand for media services relative to localisation. 

There was a strong performance in the first half of the year, supported by several one-off library orders that had been delayed from FY25Q4 into FY26Q1. This created a favourable comparison in the first half that was not replicated in the second due to the timing of customer licensing deals that can lead to large one-off orders.

Customers

ZOO remains a trusted partner to the world's leading media companies. During the year, the Group made further progress in diversifying its customer base by strengthening its relationships with several groups including certain non-traditional studios, further reducing concentration risk. The Group is seeing increased traction with streaming platforms as they review their vendor frameworks subsequent to their restructured operations and revised content strategies, not least the evolving importance of live, near-live and episodic programming. 

In FY26H2, ZOO was selected to provide multiple services across two major studio customers from which it has since received initial orders. The Group's end-to-end model, technology integration and faster fulfilment capabilities were critical factors in its selection through a competitive RFP process. While it is too early to determine the associated volumes, the Board is encouraged by the range of opportunities across multiple customers that are emerging.  The Group is continuing to see a proportionally higher share of licensed rather than original content work, orders linked to customer deals that can be sizeable but non-repeating and difficult to predict with certainty.

A recurring theme in conversations with customers is the desire for partners that combine genuine production expertise with strong technology credentials. That combination, brought together in an end-to-end service with global scale, is precisely what ZOO offers. Customers are also seeking greater flexibility and control from their vendors, particularly over pricing and delivery timelines, even as they push for faster turnarounds, in a further indication of a market moving in ZOO's direction. ZOO's platform is built to provide that visibility and control, distinguishing the Group from its peers.

Cost reduction and restructuring programme

The planned restructuring programme that has been ongoing since FY24 is now complete. The Board exercised great care in its implementation to ensure that quality metrics and customer service were not adversely affected. This has established a leaner, more flexible operating model that is profitable and cash generative even at revenue levels materially lower than previously whilst maintaining the same premium quality levels.

During FY25 and FY26 the Group has reduced its annual fixed cost base by $14.4 million, of which $7.5 million of cost savings were delivered in FY26. This has been achieved by reducing headcount in our US and UK offices and operations have moved to smaller premises. In parallel, the Group has accelerated the transition of a range of fulfilment activities to its operations in India, which is now our first choice for any future expansion of delivery capacity.

The outcome of this work is clearly reflected in our financial performance. OPEX as a percentage of revenue improved from 49.4% in FY25 to 45.7% in FY26, and the Group delivered positive Cash EBITDA of $0.4 million against a loss of $2.7 million in the prior year. FY26 has established an improved cost baseline with in-built operating leverage to support revenue growth. 

Operational resilience

The market is consolidating around a smaller group of end-to-end vendors capable of localising and creating distribution packages in multiple languages and formats across international territories. ZOO is well positioned within this subset, differentiated by its proprietary, cloud-based software platforms and distributed operating model. These are capabilities built over many years and refined continuously in close collaboration with our customers.

Customers are increasingly prioritising shorter turnaround times as they seek to reduce time-to-market and release content in quick succession across territories. As it has done throughout its history, ZOO has evolved its proposition to meet this challenge. The Group has integrated AI into its workflows to reduce friction and improve efficiency, while preserving the human expertise and creative judgement that premium content localisation demands. ZOO's technology expertise is allowing us to deploy supervised AI where it is most effective to create tangible value for ourselves and our customers. This includes functions such as transcription, translation, script preparation, and voice recording.

ZOO's proprietary cloud-based software connects talent, workflows and data in a single platform. Teams across the Group's global network operate within the same systems, enabling seamless hand-offs across time zones as part of a follow-the-sun production model. This allows ZOO to deliver at speed and scale without compromising on quality - a structural advantage that cannot easily be replicated by traditional, studio-based peers.

During the year, the Group introduced two new offerings that directly reflect evolving customer requirements. Fast Track enables accelerated processing whilst maintaining the service levels required by customers. It includes a premium service for the most time-sensitive content that compresses project timescales from weeks to hours through parallel workflows and the Group's global talent network. In addition to the premium service ZOO is also offering  a new "7-day Dub" service that enables much faster fulfilment without premium pricing that is highly competitive and protects margins.

These evolved propositions demonstrate ZOO's proven ability to adapt and innovate, developing solutions that are tailored to the evolving requirements of its customers. This has allowed the Group to navigate changing market conditions and provides the flexibility to capitalise on new opportunities.

Purpose, strategy and business model

ZOO's purpose is to enrich lives through access to entertainment which it seeks to accomplish through its mission to make life easier for the people who entertain the world. Its business model is based on the supply of services provided to leading producers and distributors of entertainment content to make their programmes available on any streaming platform, localised to meet the language and cultural requirements of any audience, which are monetised through charging competitive market rates. ZOO's foundation was initially built as a disruptor in the market by using its technological driven approach - and this remains a core strength today as the Company continues to evolve and innovate to meet evolving industry and customer requirements.

The Group's strategy is built upon five pillars:

Innovation	ZOO has a long track record of anticipating and responding to market change through technology. Fast Track is the most visible recent example, improving competitiveness, protecting margins and also enabling new premium services that dramatically compress delivery timelines without compromising on quality, made possible by the Group's cloud-based, distributed model, follow-the-sun strategy and AI integrations. The security and integrity of customer data was brought into sharp focus last year following industry security breaches. ZOO's cloud software platforms feature in-built security as standard and the Group retains a TPN Gold standard security accreditation, which is a prerequisite for major content partners.
Scalability	ZOO operates a highly scalable, asset-light model, deploying cloud-based software platforms and a global network of freelancers. The Group's global capabilities enable a follow-the-sun delivery model with projects progressing continuously across time zones. Teams operate within the same proprietary systems regardless of location, allowing seamless hand-offs so that work can continue around the clock. This model is central to the delivery of Fast Track and the Group's accelerated service fulfilment, compressing timescales from weeks to hours.
Collaboration	The Group works with a network of trusted partners and freelancers of over 12,000 professionals worldwide. This creates an asset-light, variable cost structure that can be rapidly scaled to meet demand while preserving quality.
Customer	ZOO is deepening its relationships with the world's leading streaming platforms while continuing to diversify its revenue base to reduce customer concentration risk. The quality of ZOO's services is monitored by several of its major customers, and during the period the Group achieved exceptionally high KPI scores as reported by some of its largest clients of 99.3% in FY26.
Talent	ZOO's talent base comprises employed staff across its international facilities with a freelance community of over 12,000 professionals. The Group has further expanded its Chennai facility in India, which is becoming an increasingly important operational centre, providing access to high-quality talent at a competitive cost structure. India is ZOO's preferred location for delivery capacity growth, and the Chennai facility is expected to take on a greater share of fulfilment activity as revenues build.

Outlook

The Board expects to return to growth as streaming companies continue to seek reduced time-to-market and commission more live, near-live and time-sensitive content. Conversations are ongoing with multiple customers across both localisation and media services, reflecting the broadening demand for accelerated delivery. 

Increased RFP activity and recent RFP successes are expected to convert into higher order volumes as the Group is selected for new framework agreements, further diversifying revenues across a wider range of customers.

The Board believes that the market has stabilised and is moving in ZOO's direction, with customers focusing on speed, quality and control. This requirement limits the number of vendors that are able to compete, and plays to ZOO's strengths.

Trading in the first quarter of FY27 has been encouraging, which gives the Board confidence in delivering a return to revenue growth and profit progression in FY27. 

We have built a more resilient rightsized business. The restructuring is complete, the cost savings are delivered, and we have demonstrated that the Group is profitable and cash generative. Faster fulfilment requirements create new opportunities, including the Fast Track service, positioning the Group to win a greater share of an evolving market. The foundation for the next phase of growth is in place.

The Board is optimistic for the medium- and long-term fundamentals of the Group. A further update on trading will be provided at the AGM to be held on 29 September 2026.

Stuart Green
Chief Executive Officer

FINANCIAL REVIEW

Introduction

FY26 concluded a challenging period for ZOO, marking the final stages of a major reorganisation of the business.  The reorganisation has improved profitability and cash generation, from higher margins and having reduced the fixed operational cost base. This has been achieved whilst preserving the operational capabilities and the competitive edge of the business, as can be evidenced by the success of the "Fast Track" premium service, offering accelerated localisation, which now accounts for around 10% of the Group's revenues.

Revenue reduced in FY26 to $42.3 million (FY25: $49.6 million), due to a fall in demand for dubbing services caused in part by FY25 benefitting from a backlog of work created following the Hollywood actors and writers strikes in FY24.  This was offset by gross profit margin increasing to 42% (FY25: 36%) showing that the reduction in revenue had limited impact on gross profit which reduced to $17.6 million (FY25: $18.0 million).  A $5.5 million reduction in administrative expenses to $19.4 million (FY25: $24.5 million) cut the operating loss to $1.6 million (FY25: $6.5 million).  By adding back depreciation and amortisation of $5.6 million (FY25: $7.6 million) EBITDA increased to $4.0 million (FY25: $1.1 million).  This improvement in adjusted EBITDA increased the cash inflow from operating activities to $3.5 million (FY25: $1.5 million), and increased the cash and cash equivalents held at the end of the year to $3.6 million (FY25: $2.7 million).  As at the end of the year $1.4 million (FY25: nil) was drawn down on the HSBC financing facilities which were utilised to help reduce the trade creditor balance to $5.9 million (FY25: $10.4 million).

Revenue

In the financial year ended 31 March 2026, total revenues decreased 15% to $42.3 million (FY25: $49.6 million). This is due to FY25 benefitting from a backlog of dubbing work created by the Hollywood strikes in FY24.  Excluding dubbing, all other revenues remained flat year on year at $36.6 million. During the year ZOO continued to develop its relationships with existing and new customers, focusing on how its proprietary technology can accelerate delivery times. This, along with its consistently high quality scores, has resulted in the recently announced RFP wins, positioning the Group to return to growth in FY27.

Most of the Group's operations are in the United States, where revenues were down 2% at $30.4 million (FY25: $30.9 million). The balance of work was performed in Europe and Asia which decreased by 36% to $12.0 million (FY25: $18.7 million), driven by a reduction in European dubbing projects.

Customer concentration reduced during the period with the revenue contribution from the Group's two largest clients falling to 59% of sales (FY25: 68%). This was primarily a consequence of a reduction in dubbing orders from a UK customer due to the backlog of work received in FY25 after the Hollywood strikes. Revenues from other customers and new engagements increased during FY26, helping to diversify the customer base.

The Group previously reported two revenue segments: media production and software solutions. Software solutions is a declining legacy service that contributed 2.6% of revenue in FY26 and will no longer be reported as its own segment. The media production segment is split into localisation and media services to provide investors with greater transparency, and the media services numbers will include the legacy software solutions segment.

Media localisation revenues decreased by 6% in the year to $24.2 million (FY25: $30.3 million) and Media services revenues decreased by 6% to $18.1 million (FY25: $19.3 million).

Segment contribution

The Group reports gross profit after deducting both external and internal variable costs to reflect that most of its revenues are derived from the provision of services to our customers. To add clarity to the financial statements, a table is included in Note 4 showing the Group's key operating segment split between Localisation and Media Services. This shows that overall gross profit fell by 2% to $17.6 million (FY25: $18.0 million). This represents a gross profit margin of 42%, up from 36% in FY25, due to a lower fixed cost base and the increased mix of higher margin media services revenue.

Administrative expenses

Operational fixed costs, which are defined as operating expenses less share-based payments, depreciation and amortisation, decreased by 19% to $13.8 million (FY25: $16.9 million) due to a significant reduction in headcount. Overall, operating expenses decreased by 21% to $19.4 million (FY25: $24.5 million).

Non-operating income and costs and loss for the year

Share of loss of JVs was in line with last year with a loss of $49k (FY25: $48k).

During the year, and following the Board's annual review of carrying values, the Group recognised a $1.5 million impairment against investments in its joint ventures in Turkey and Spain. The impairments reflect the current accounting assessment of the recoverable amount of each investment, having regard principally to the expected future cash flows generated directly by the corresponding joint venture.

Whilst the carrying value of each investment has been reduced, the Board continues to regard the joint ventures as strategically important to the Group. They each provide capabilities, geographic reach and customer relationships that have enhanced the Group's ability to compete and be successful in competitive RFP processes and bids during the year.

These wider commercial benefits are expected to continue to support growth across the Group, although many of those benefits are realised within other Group businesses rather than through distributions or cash flows generated by the joint ventures themselves.

The recoverable amount used to assess the carrying value of the investments reflects only the cash flows expected to arise from the assets themselves. In accordance with IAS 36 the value of these wider synergies and strategic benefits, arising elsewhere within the Group, have not been included in the recoverable value.

The Board therefore remains committed to the strategic relationships while recognising that, under the applicable accounting standards, those broader strategic benefits cannot be reflected in the carrying value of the investments.

Finance costs were up slightly in the year at $0.5 million (FY25: $0.4 million) due to increased utilisation of the invoice financing facilities.

Disposal of Investments and right of use assets showed a loss of $0.2 million (FY25: nil) as we were able to exit a property lease earlier than expected, reducing property costs and lease payments. The loss represents the write down of the associated right of use asset.

Despite the reduction in revenue, and as a result of the restructuring of the cost base, the Group reported an improvement in operating losses to $1.6 million compared to a loss of $6.5 million in FY25.

Loss before tax was $3.8 million compared to a loss of $8.3 million last year for the reasons highlighted above.

In the year the Group recognised a tax credit of $0.2 million (FY25: $0.4 million) primarily due to the recognition of a deferred tax asset in ZOO Digital India Private Limited. 

Liquidity and debt facilities

HSBC is providing the Group with invoice financing facilities in both the US and the UK. The US facility commenced in 2022 and will currently fund up to $5 million on invoices raised from our US subsidiary, increased from $3 million at the beginning of the period. The UK facility commenced in 2024 and will currently fund up to £2 million on invoices raised in the UK. Both facilities are renewed on a yearly basis with the next US renewal due in March 2027 and the UK renewal due in November 2026.

The invoice financing facilities were used selectively during the year and $1.4 million was drawn as at 31 March 2026 (FY25: nil) on a trade receivables balance of $5.9 million. 

Statement of financial position

Non-current assets decreased by 16% in the period to $19.6 million (FY25: $23.4 million). The decrease is mainly due to the reduction in value in right of use assets and leasehold improvements.  This reflects the reduction of time left to run on property leases, and the downsizing of the office space required in Sheffield due to more flexible working practices.

The capitalisation of research and development costs increased by 9% to $1.7 million (FY25: $1.5 million) as we completed several product developments including integrating AI into our cloud-based workflow platforms. This now enables accelerated localisation reducing delivery times for subtitling from an industry standard of 2-3 weeks to 3 hours and dubbing from an industry standard of 4-5 weeks to 24 hours, without any reduction in quality. The amortisation charge decreased by 5% to $2.1 million (FY25: $2.2 million).

Trade and other receivables decreased by 38% to $8.0 million (FY25: $12.9 million) reflecting improved cash collections. Contract assets, which represent work in progress and sales accruals on customer projects, increased by 2% to $2.3 million (FY25: $2.2 million).

Current liabilities decreased by 22% to $14.3 million (FY25: $18.3 million) as we used the cash generated by improved collections and the invoice financing facilities to reduce the trade creditors by 43% to $5.9 million (FY25: $10.4 million).

Cash and cash equivalents increased by 32% to $3.6 million at year end (FY25: $2.7 million).

Non-current liabilities decreased in the year by 45% to $1.8 million (FY25: $3.2 million) due to the reduction in the right to use liability on our property leases.

Consolidated statement of cash flows

Net cash generated from operating activities increased by 136% to $3.5 million (FY25: $1.5 million). The increase of $2.0 million is attributable to the improved profitability, more efficient billing and collections and included an outflow of $5.6 million to reduce trade and other payables. The inflow from operating activities was offset by a $1.6 million spend on investing activities, which was a decrease of $0.6 million on FY25. The decrease was due to the reduction in R&D spend and capex required to align our international operations with Group requirements. The $0.7 million outflow from financing was predominately due to the $1.6 million repayment of principal under lease liabilities relating to leasehold properties in the USA and India, and a $1.4 million inflow from a drawdown on the HSBC invoice financing facility. Overall, the cash balance increased from $2.7 million to $3.6 million.

Post balance sheet events and going concern

Going forward, the Group remains confident that it has sufficient headroom to trade for the foreseeable future, as the increase of the US HSBC invoice financing facility from $3 million to $5 million, together with a separate European facility of £2 million, is expected to give us the required working capital headroom to support the current run rate of business but also allows for potential future growth.  The Directors remain confident that these facilities will be renewed.

In addition, the improving trading position, reduction in monthly costs, forecast profitability and cashflows from operations gives us additional confidence in the future. For these reasons, we continue to adopt the going concern basis in preparing the financial statements. Further details can be found in the Directors' Report on page 32 of the Annual Report.

Principal risks and uncertainties

Company law requires the Group to report on principal risks and uncertainties facing the business, which the Directors believe to be as follows:

International business

While the Group is domiciled in the UK, its main country of operations is the US and over 69% of ZOO's revenues come from overseas clients. As with most small international businesses cash flow and management of exchange rate fluctuations present risks. The Group continues to focus on conservative cash management and closely monitors currency transactions.

Political uncertainty

The political climates in the UK and US are currently challenging due to the global economic environment.  Although the terrible situations in Ukraine and the Middle East continue to have a major effect on the world economy, the current impact on ZOO is negligible. The Directors monitor emerging news and trends and remain alert to any potential impact on the trading of the Group. Specifically, the threats of tariffs on media assets are not expected to dim the international appeal of film and TV programmes and therefore the need to localise content.

Technology conservation

The Group continues with a patent protection policy, with 14 patents granted, having allowed some legacy patents which are no longer beneficial to lapse. These active patents are integral to the business in the protection of our unique technologies.

Operational risks

The main operational risk is in managing any unexpected peaks or troughs in production orders and ensuring that the appropriate levels of resource are available to provide the quality of services expected by our clients.  This risk is managed by having a core of highly skilled permanent staff along with a pool of temporary staff that can be brought in at short notice to help at times of high volume.  We have supplemented these resources by engaging international businesses to operate within our technology platform, giving us further variable cost capacity. The use of technology helps mitigate this risk by streamlining processes as much as possible and enabling efficient access to a large, global and scalable pool of independent contractors. The Group has adopted AI where appropriate to help with reducing costs, accelerating service fulfilment and managing capacity.

Cyber Risks

Like most digital businesses, the Group faces cyber risks in four key areas: Intellectual Property Theft refers to unauthorised access and use of the Group's own software and data that could undermine its competitive position; Data Breaches refers to exposure of sensitive data, such as client information and unreleased media which could result in disclosure of confidential information, leading to reputational and financial damage; Ransomware Attacks, caused by malicious software that could prevent us from accessing our IT systems and the data stored on them, could disrupt our operations and delay project completions; and Social Engineering, which refers to manipulating people so they give up confidential information (e.g. the fraudulent practice of Phishing where messages are sent purporting to be from reputable people and companies in order to induce individuals to reveal personal information such as passwords), could compromise our systems and data security. Although we assess our risk level as medium/low compared to more prominent industry players, the potential impact of these risks remains high. To mitigate these threats, we have implemented industry-standard security tools, managed by reliable third parties. ZOO's proprietary cloud-based software has been designed from the outset with high levels of security in mind and incorporates a range of measures to protect confidential data throughout end-to-end workflows, incorporating features that include encryption, multi-factor authorisation and watermarking. In June 2024 the Group completed its most recent biennial third-party Trusted Partner Network (TPN) security audit, which involved a thorough evaluation of ZOO's security protocols, infrastructure, and practices, earning a Gold Shield for the ZOOsubs, ZOOdubs and ZOOscripts platforms. TPN is the leading, global, industry-wide film and television content security initiative. Designed to assist companies in preventing leaks, breaches, and hacks of movies and television shows prior to their intended release, TPN seeks to raise security awareness, preparedness, and capabilities within the industry. TPN is owned and managed by the Motion Picture Association. Cyber security is a key focus of management and our IT team, and we ensure all staff are continuously trained to maintain a security-first approach.

Artificial Intelligence

Third party software products and services have emerged that make use of Artificial Intelligence (AI), which refers to the ability of a machine-based system to apply analysis and logic-based techniques to solve problems, to perform tasks and improve as more data is analysed. This includes applications in which the Group provides services, including the creation of closed captions, inter-lingual subtitles, audio description and dubbing. Such technologies have the potential to displace some of the services currently offered by the Group. The Directors monitor emerging technologies, evaluate third party products where applicable and remain alert to any commercial implications they may have. The Group's internal Research and Development department has actively developed and enhanced such technologies over several years with multiple capabilities now actively deployed within the Group's cloud platforms. As an innovator in its sector the Directors believe that the Group is well positioned to assess where AI technologies are appropriate in its business, taking full account of their benefits and risks, and to capitalise on these, thereby mitigating any apparent threat.

Loss of the Group's key clients

Client relationships are crucial to the Group and the strength of them is key to its continued success. The Group mitigates this risk by having multiple staff working closely with each of the largest clients across different business units and seeking to secure long term contractual agreements for supply of technology and services.  The Group focusses on providing high quality services to all clients to ensure an attractive and differentiated offering thereby reducing the likelihood of client loss.

Corporate activity within key clients

Merger and acquisitions within key clients represent a risk as they can disrupt sales.  This risk is mitigated by ensuring an awareness of news in the market and focussing on diversifying the client base.

Financial risks

The main financial risks faced by the Group are in relation to foreign currency and liquidity.  The Directors regularly review and agree policies for managing these risks.

The functional currency and presentation currency of the Group are US dollars as most of the Group's transactions are undertaken in US dollars, however, the Consolidated Statement of Financial Position can be affected by movements between pound sterling and the US dollar as the parent company and UK subsidiaries have some pound sterling debtors and creditors. Foreign currency risk is managed by matching payments and receipts in foreign currency to minimise exposure. Further information on the financial risks is given in note 30 to the accounts.

The Group is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The Group regularly monitors cash flows and cash resources and can draw down funds from financing facilities in the UK and the US.

By order of the Board

Approved by:

Robert Pursell

Director and Secretary

29 July 2026

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2026

		2026	2025
	Note	$000	$000
Revenue	5	42,343	49,570
Cost of sales		(24,715)	(31,549)
Gross Profit		17,628	18,021
Other income	6	120	-
Administrative expenses	8	(19,358)	(24,499)
Operating loss		(1,610)	(6,478)
Analysed as:
Adjusted EBITDA	11	3,993	1,109
Share based payments	8	-	-
Depreciation and impairment	8	(3,335)	(5,197)
Amortisation	8	(2,268)	(2,390)
		(1,610)	(6,478)
Share of loss of associates and JVs	18	(49)	(48)
Disposal of Investments and ROU assets		(184)	-
Impairment loss on associate	18	(1,542)	(1,457)
Finance income	7	25	43
Exchange gain/(loss) on borrowings	7	(16)	20
Finance cost	7	(468)	(422)
Total finance costs		(459)	(359)
Loss before taxation		(3,844)	(8,342)
Tax credit on loss	12	157	362
Loss for the year		(3,687)	(7,980)

    Other comprehensive income

Currency translation gain/(loss)		(332)	14
Total comprehensive loss for the year		(4,019)	(7,966)

Loss for the year and total comprehensive loss for the year are all attributable to the owners of the Parent Company

Loss per share	14
basic		(3.80) cents	(8.10) cents
diluted		(3.80) cents	(8.10) cents

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 March 2026

		2026			2025
	Note	$000			$000
ASSETS
Non-current assets
Intangible assets	17	13,573			14,285
Property, plant and equipment	15	4,004			7,218
Investment in associated undertakings	18	-			1,591
Deferred income tax assets	19	461			321
		18,038			23,415
Current assets
Trade and other receivables	20	7,956			12,883
Contract assets	26	2,290			2,244
Cash and cash equivalents	21	3,574			2,714
		13,820			17,841
Total assets		31,858			41,256
LIABILITIES
Current liabilities
Trade and other payables	25	(11,104)			(16,160)
Contract liabilities	26	(289)			(618)
Borrowings	24	(2,894)			(1,473)
		(14,287)			(18,251)
Non-current liabilities
Borrowings	24	(1,758)			(3,185)
		(1,758)			(3,185)
Total liabilities		(16,045)			(21,436)
Net assets		15,813			19,820
EQUITY
Equity attributable to equity holders of the parent
Called up share capital	23	1,290			1,290
Share premium reserve	23	70,805			70,805
Foreign exchange translation reserve	23	(126)			(138)
Share option reserve	23	1,319			2,692
Capital redemption reserve	23	6,753			6,753
Interest in own shares	23	(63)			(63)
Other reserves	23	12,320			12,320
Merger reserve	23	1,326			1,326
Accumulated losses	23	(77,811)			(75,165)
Attributable to equity holders		15,813			19,820

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2026

	Ordinary shares	Share premiumreserve	Foreign exchange translation reserve	Share option reserve	Capital redemption reserve	Merger reserve	Other reserves	Accumulated losses	Interest in own shares	Total equity attributable to the owners of the Parent
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
Balance at 1 April 2024	1,284	70,683	(152)	2,685	6,753	1,326	12,320	(67,185)	(63)	27,651
Issue of Share Capital	6	122	-	-	-	-	-	-	-	128
Share options exercised	-	-	-	7	-	-	-	-	-	7
Transactions with owners	6	122	-	7	-	-	-	-	-	135
Loss for the year	-	-	-	-	-	-	-	(7,980)	-	(7,980)
Foreign exchange loss on overseas subsidiary translation	-	-	14	-	-	-	-	-	-	14
Total comprehensive income for the year	-	-	14	-	-	-	-	(7,980)	-	(7,966)
Balance at 31 March 2025	1,290	70,805	(138)	2,692	6,753	1,326	12,320	(75,165)	(63)	19,820
Prior Year Adjustment*	-	-	-	(966)	-	-	-	966	-	-
Restated at 31 March 2025	1,290	70,805	(138)	1,726	6,753	1,326	12,320	(74,199)	(63)	19,820
Issue of Share Capital	-	-	-	-	-	-	-	-	-	-
Share options lapsed	-	-	-	(407)	-	-	-	407	-	-
Transactions with owners	-	-	-	-	-	-	-	-	-	-
Loss for the year	-	-	-	-	-	-	-	(4,019)	-	(4,019)
Foreign exchange loss on overseas subsidiary translation	-	-	12	-	-	-	-	-	-	12
Total comprehensive loss for the year	-	-	12	(407)	-	-	-	(3,612)	-	(4,007)
Balance at 31 March 2026	1,290	70,805	(126)	1,319	6,753	1,326	12,320	(77,811)	(63)	15,813

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 March 2026

		2026	2025
	Note	$000	$000
Cash flows from operating activities
Operating loss for the year		(1,610)	(6,478)
Depreciation and impairment	15	3,335	5,197
Amortisation and impairment	17	2,268	2,390
Share based payments		-	-
Disposal of property, plant and equipment		-	-
Changes in working capital:
Decrease/(Increase) in trade and other receivables		4,881	(1,074)
(Decrease)/Increase in trade and other payables		(5,385)	1,073
Cash flow from operations		3,489	1,108
Tax received		17	377
Net cash inflow from operating activities		3,506	1,485
Investing activities
Purchase of intangible assets	17	-	(7)
Capitalised development costs	17	(1,656)	(1,519)
Purchase of investments		-	-
Business combinations (net of cash acquired)		130	(30)
Purchase of property, plant and equipment	15	(132)	(731)
Sale of property, plant and equipment		-	-
Finance income		25	43
Net cash outflow from investing activities		(1,633)	(2,244)
Cash flows from financing activities
Proceeds from borrowings		1,371	-
Repayment of borrowings		(65)	-
Repayment of principal under lease liabilities		(1,562)	(1,585)
Finance cost		(472)	(388)
Share options exercised		-	7
Issue of share capital		-	128
Transaction costs for issue of share capital		-	-
Net cash (outflow) from financing		(728)	(1,838)
Net increase/(decrease) in cash and cash equivalents		1,145	(2,597)
Cash and cash equivalents at the beginning of the year		2,714	5,315
Exchange loss on cash and cash equivalents		(285)	(4)
Cash and cash equivalents at the end of the year	21	3,574	2,714

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 March 2026

1.     General information

ZOO Digital Group plc ('the Company') and its subsidiaries (together 'the Group') provide services for digital content authoring, video post-production and localisation for entertainment, publishing and packaging markets and continue with on-going research and development in those areas. The Group has operations in the UK, US, India, Italy, Germany, Dubai and S. Korea and joint ventures in Turkey and Spain.

The Company is a public limited company which is listed on the AIM Market of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is 7^th Floor, Citygate, 8 St Mary's Gate, Sheffield.

The registered number of the Company is 03858881.

The consolidated financial statements are presented in US dollars, the currency of the primary economic environment in which the Company operates (note 2.4.1). Monetary amounts in these financial statements are rounded to the nearest $000. The functional currency of the parent Company, ZOO Digital Group plc, is US dollars.

2.     Statement of compliance

The financial information set out in this preliminary announcement does not constitute the Group's statutory financial statements for the period ended 31 March 2026 or 31 March 2025 as defined in section 435 of the Companies Act 2006 (CA 2006) but is derived from those audited financial statements. Statutory financial statements for 2025 have been delivered to the Registrar of Companies and those for 2026 will be delivered in due course. The auditors reported on those accounts, their reports were unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group.

3.     Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.

3.1     Basis of preparation and going concern

Group financial statements

These financial statements have been prepared in accordance with UK adopted international accounting standards and the requirements of the Companies Act 2006.

The preparation of financial statements in accordance with UK adopted international accounting standards and the requirements of the Companies Act 2006 requires management to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in note 3.

Going concern

The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons.

The Directors have reviewed the Group's forecasts up until 31 August 2027, taking account of the recovery and reasonably possible changes in trading performance, together with the planned capital investment over that same period. The Group is expected to have a sufficient level of financial resources available through operating cash flows for the period to 31 August 2027 ("the going concern period").

For the purpose of assessing the appropriateness of the preparation of the Group's accounts on a going concern basis, the Directors have produced a financial model which includes a profit and loss account, balance sheet and cash flow forecast for the Group for the period to 31 August 2027. The forecasts consider the current cash position, the availability of banking facilities and an assessment of the principal areas of risk and uncertainty. This forecast shows that the business is EBITDA profitable and cash generative for the full forecast period. The cash generated will primarily be used to improve liquidity by further reducing trade creditors and paying down borrowings.  In line with industry practice in this sector the Directors have used run rate business and informal indications from clients to substantiate a significant proportion of the forecast sales.

The Directors have also conducted a stress test exercise which involved reducing the revenue forecast to determine the point at which the Group's financing facilities would be exhausted. This included a series of cost reduction initiatives including exiting leases where possible and a reduction in the workforce to reflect the lower volumes of work.  Upon review it was determined that the level of revenue required to exhaust the Group's financing facilities was not a plausible scenario.

The Group has a facility with HSBC Bank which provides invoice financing of up to $5.0 million against US client invoices raised by ZOO Digital Production LLC. This facility is reviewed on an annual basis and was previously renewed on 31 March 2026 where the facility was increased from $3.0 million to $5.0 million. In the UK there is a similar facility which provides up to £2.0 million ($2.7 million) against UK and Non-US client invoices raised by ZOO Digital Limited and an overdraft facility with a limit of £250,000 ($345,000) in place with HSBC. Whilst the invoice financing facilities are cancellable by either party on a 90-day notice period, the directors are confident that they will be renewed and will remain available for the foreseeable future

The Directors believe the assumptions used in preparing the trading and cash flow forecasts to be realistic and that the reverse stress test is implausible. Consequently, the Directors believe the Group will continue in operational existence for the foreseeable future, and the financial statements have therefore been prepared on a going concern basis.

3.1.1 Standards and interpretations in issue at 31 March 2026 but not yet effective and have not yet been adopted early by the Group

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK Endorsement Board):

Standard/Interpretation	Effective Date
Classification and Measurement of Financial Instruments (Amendments to IFRS 7 and IFRS 9)	1 January 2026
Contracts Referencing Nature-Dependent Electricity (Amendments to IFRS 7 and IFRS 9)	1 January 2026
IFRS 18 'Presentation and Disclosure in Financial Statements'	1 January 2027
IFRS 19 'Subsidiaries without Public Accountability: Disclosures'	1 January 2027

Effective dates refer to periods commencing on or after this date. The Group's reported financial results are not expected to be materially affected by any standard. However, the presentation and disclosure of its results are expected to be impacted by the adoption IFRS 18 which is predominantly a disclosure-only standard. Given this impacts only disclosures, the Directors do not expect there to be an impact on the reported profits or net assets of the Group from adopting these standards. As this is a disclosure-led standards, the Directors have not presented a list of impacts on the financial statements.

3.2  Consolidation

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is obtained until the date that control ceases.

The consolidated financial statements of ZOO Digital Group plc include the results of the Company and its subsidiaries.  Subsidiary accounting policies are amended where necessary to ensure consistency within the Group and intra group transactions are eliminated on consolidation.

The Group applies the acquisition method when accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and equity interests issued the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

Assets acquired and liabilities assumed are generally measured at their acquisition date fair values. However, such fair values and all associated accounting entries are subject to revision during a period not exceeding 12 months following the date of acquisition, insofar as the accounting for the business combination is incomplete by the end of the first reporting period date. As a result, ZOO Digital Group plc revises any provisional amounts retrospectively to reflect further evidence received in respect of acquisition date values. There have been no revisions in the current year.

3.3     Foreign currency translation

3.3.1       Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in US dollars which is the parent Company and Group's functional and presentation currency. The functional currency of the Company's primary operating subsidiaries is US dollars, therefore the majority of transactions between the Company and its subsidiaries and the Company's revenue and receivables are denominated in US dollars.

The US dollar/pound sterling exchange rate at 31 March 2026 was 0.752 (2025: 0.775).

In 2009 the Group changed its functional currency from Pound Sterling to US Dollars, creating a translation reserve at this date. Following a review of the reserve at that date, the Directors have determined that the continued existence of this does not support the clarity of the financial statements, and that the reserve is better utilised in the ongoing translation of new foreign subsidiaries that do not have the US Dollar as functional currency. Accordingly, in the prior year the brought forward element of the reserve has been reclassified in its entirety to retained earnings.

3.3.2       Transactions and balances

Transactions in foreign currencies are recorded at the prevailing rate of exchange in the month of the transaction. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the profit/(loss) for the year in the Consolidated Statement of Comprehensive Income.

3.3.3       Group companies

The results and financial position of all Group entities that have a functional currency different from the presentation   currency are translated into the presentation currency as follows:

·      assets and liabilities for each entity are translated at the closing rate at the year end date;

·      income and expenses for each Statement of Comprehensive Income are translated at the prevailing monthly exchange rate for the month in which the income or expense arose.

4.     Earnings per share

Basic earnings per share ("EPS") is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Diluted EPS is calculated by dividing the profit attributable to the equity holders of the Parent by the weighted average number of ordinary shares outstanding plus the weighted average number of shares that would be issued on conversion of all the dilutive share options into ordinary shares.

		Basic and Diluted
		2026	2025
		$000	$000
(Loss)/profit for the financial year		(3,687)	(7,979)

					2026	2025
					Number of shares	Number of shares
Weighted average number of shares for basic & diluted profit per share
Basic					98,318,228	97,976,898
Effect of dilutive potential ordinary shares:
Share options					-	-
Diluted					98,318,228	97,976,898

					2026	2025
					Cents	Cents
Basic					(3.80)	(8.20)
Diluted					(3.80)	(8.20)

Diluted earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options. In the event that a loss is recorded for the year, share options are not considered to have a dilutive effect.

5.     Notes to the cash flow statement

5.1 Significant non-cash transactions

During the year the Group acquired property, plant and equipment and computer software with a cost of $457,000 (2025: $1,226,000) of which $325,000 (2024: $495,000) was acquired by means of a lease.

5.2 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise the following consolidated and parent company statement of financial position amounts.

	Group		Company
	2026	2025	2026	2025
	$000	$000	$000	$000
Cash on hand and balances with banks	3,574	2,714	12	21

All cash balances are readily available with withdrawal in less than 90 days.

6.     Share capital and reserves for Group and Company

Called up share capital

	2026	2025
	$000	$000
Allotted, called-up and fully paid
98,318,228 (2025: 98,318,228) ordinary shares of 1p each	1,290	1,290

Reconciliation of the number of ordinary shares outstanding:
Opening balance	98,318,228	97,856,924
Shares issued under UK share save scheme at a price of 41p	-	31,304
Korea Acquisition	-	-
Fundraise	-	-
Share options exercised at a price of 15p	-	430,000
Closing balance	98,318,228	98,318,228

Reserves

The following describes the nature and purpose of each reserve within owner's equity:

Reserve	Description and purpose
Share premium reserve	Represents the amount subscribed for share capital in excess of the nominal value.
Foreign exchange translation reserve	Cumulative exchange differences resulting from the Group changing reporting currency from pounds sterling to USD.
Share option reserve	Cumulative cost of share options issued to employees.
Capital redemption reserve	Represents 32,660,660 deferred shares of 14p each created during the share reorganisation on 4 May 2017.
Interest in own shares	This arises from ZEST and concerns historical transactions as part of the Group's employee benefit trust.
Merger reserve	As part of acquisitions the Group has issued share capital as part of its consideration. As set out in s612 Companies Act 2006, merger relief has been applied and the excess above the nominal value of share capital has been recognised in the merger reserve.
Other reserves	Created as part of the reverse takeover between Kazoo3D plc and ZOO Media Corporation Ltd in 2001.
Accumulated losses	Cumulative net losses recognised in profit or loss.

7.     Borrowings

	Group		Company
	2026	2025	2026	2025
	$000	$000	$000	$000
Non-current
Other Loans (Gov. loan to ZOO Korea)	172	237	-	-
Lease liabilities	1,586	2,948	-	61
	1,758	3,185	-	61

Current
Amounts owed to subsidiary undertakings	-	-	9,701	9,701
Other bank borrowings	1,371	-	-
Lease liabilities	1,523	1,473	24	102
Borrowings	2,894	1,473	9,725	9,803
Total borrowings	4,652	4,658	9,725	9,864

The Group has renewed on 31 March 2026 with HSBC Bank US an invoice financing facility of up to $5.0 million against US client invoices raised by ZOO Digital Production LLC. The facility is in place until the renewal date of 31 March 2027.

The UK banking partner, HSBC, continues to provide an overdraft facility of £250,000.  The principal outstanding at 31 March 2026 was nil (2025: nil).  This line of funding has been secured as a floating charge over the assets of the UK companies and automatically renews on an annual basis. 

In October 2025 the Group was approved for an invoice financing facility of up to $2.0 million against UK client invoices raised by ZOO Digital Limited. The facility is in place until the renewal date of 30 September 2026.

Annual report and Accounts

Copies of the Report & Accounts for the year ended 31 March 2026 will shortly be available to view on the Group's website www.zoodigital.com

The Report & Accounts for the year ended 31 March 2026, together with the notice of annual general meeting, are expected to be posted to shareholders in early September 2026; an announcement to notify shareholders of this will be made in due course. Further copies will be available from the Company's Registered Office: 7^th Floor Citygate, 8 St Mary's Gate, Sheffield S1 4LW.

Annual General Meeting

The Annual General Meeting of the Group will be held at Canaccord Genuity Limited, London EC2V 7QR on 29^th September 2026 at 5pm

 

END