Yorkshire media firm warns of ‘significant’ losses as Hollywood strikes disrupt business

Shares in the company fell sharply this morning following the announcement.

Speaking at the firm’s annual general meeting, chairman Gillian Wilmot said: "The market disruption and temporarily subdued demand for localisation and media services are continuing. Major media organisations are in the process of realigning for profitability, and industrial action by writers and actors is ongoing.

“Consequently, visibility remains limited, and resolution of the strikes is essential for normal order flow to resume.

"Whilst orders are being processed monthly, they have been and continue to be at historically low levels such that first half revenues are expected to be approximately $21 million, leading to a significant EBITDA loss for the first half of the current financial year.”

The firm posted $51.4 million in revenue for the first half of the year in 2022.

The Yorkshire firm said the continued strikes had led to it revising its statement that former order levels would resume from next month, and that a “range of revenue outcomes” were now possible for the second half of the financial year, including similar revenue levels to the first half of this year.

Headed by Stuart Green, who took over as CEO of the firm in 2006, Zoo Digital has worked with studios including Warner Bros, Disney and Universal.

The Writers Guild of America (WGA) announced on Tuesday that it would officially end the writer’s strike, after coming to an agreement with the Alliance of Motion Picture and Television Producers. The WGA said that writers would be free to start working again while a ratification vote takes place on a new three-year contract with Hollywood studios.

The WGA said it had won significant concessions including on the use of artificial intelligence and writer’s pay, after the strike which lasted 146 days.

While daytime and late-night television shows are expected to soon resume, most television and film productions are not yet expected to restart, due to the Hollywood actors’ strike still being under way.

Ms Wilmot said that despite progress being made on the strikes, ongoing disruptions continue to have a “significant short-term impact” on the firm.

Ms Wilmot added that the company is in a “strong financial position” with net cash at 30 September expected to be no less than $16 million.

The Company intends to announce its interim financial results for the six months to 30 September in November 2023.

The firm added that it has also delayed the acquisition of its Japanese partner company until order flow normalises.