PIONEERING Sheffield-based entertainments technology group, ZOO Digital, is raising more than half a million pounds of additional working capital as it begins to reap the rewards of its innovative DVD authoring software.
The news comes at the end of a financial year during which the Furnival Square firm signed a 15 year deal, worth at least $15 million, with world famous cartoon studio Walt Disney and a deal for Sony Pictures Entertainment to use its technology to produce standard definition DVD titles.
ZOO says planned investment and the cost of integrating its US acquisition, Scope Seven, has meant pre-tax losses have mounted to £1.4 million from £900,000 on sales down from £4.2 million to £3.3 million.
Revenues from Scope Seven, a top US DVD authoring company, initially fell short of expectations as the business moved from serving leading Hollywood studios through an intermediary, to pursuing direct relationships, but ZOO believes there will be long term advantages as the previous relationship prevented it dealing directly with several studios.
The Sheffield firm says it has been able to replace the revenues with business from a broader base of clients and, by the end of the year, revenues had recovered to levels anticipated at the time of the acquisition.
Chairman, Dr Christopher Honeyborne, says ZOO made "significant progress" in the year to the end of March as the company moved into a position where it could maximise the return on investment in technological developments during the past few years.
A number of ZOO's existing investors have backed its move to raise around £512,000 before expenses by placing 3.4 million new ordinary shares on the Alternative Investment Market.
Chief executive Stuart Green is buying 1.3 million of the shares, increasing his holding to 19.6 per cent of the company, Herald Investment Management is buying 1.8 million shares, and will own 16.8 per cent of the company, while South Yorkshire Investment Fund is acquiring 280,000 shares, to increase its holding to 8.4 per cent.
Mr Green said: "The past year has been one of transition and we are pleased with the progress we have made. Through the acquisition of Scope Seven we have created a compelling offering for US markets, combining technology with service and increasing our resources and presence close to our core studio customers in Hollywood."
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