Yorkshire-based firm will issue 28m shares at 9p, with 12m more subject to approval
Companies: ZOO Digital Group plc
Zoo Digital, the AIM-listed micro-cap, has announced plans to raise c.£2.5m through a placing to enable it to reduce debt, strength its balance sheet, and provide capital to enable growth.
The Yorkshire-based company says it intends to 28m new shares at 9p, and 12m more through a three-year extension to its outstanding CLN1 and CLN2 loans, subject to shareholder approval.
ZOO's share price fell 17% on the news, close to the issue price of 9p, continuing its recent decline, now 30% since its 7 April.
Revenues for the full-year are expected to be at least $16m, up from $11m last year, with underlying EBITDA of at least $1.8m a sizeable increase on the $200k reported in 2016.
The Company said it was making progress with its strategy of winning new clients and diversifying revenues:
"The Directors believe that the Company has the opportunity to grow consistently and win market share in digital distribution and localisation, being a large and expanding segment of the media and entertainment industry."
finnCap analyst Harold Evans said the placing would help the Group capitalise on strong sales growth and demand for its services:
"[Zoo] is currently experiencing strong growth (FY17E sales: +39%) thanks to industry tailwinds and growing demand for its support services. The company has raised £2.5m of new equity (subject to GM approval) to capitalise on this favourable environment and scale accordingly."
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