This morning’s trading statement from ZOO confirms that production companies are taking longer than expected to complete projects. This follows the resumption of new production after the industry-wide strikes ended in November 2023. The anticipated January ramp-up has yet to fully materialise, with entertainment projects expected to complete in January now moving into February and beyond. However, ZOO has been notified by its largest customer of a pipeline of orders that provides good visibility for the next two quarters, an improvement on the usual quarterly order certainty. These orders, coupled with workflow from ZOO’s other major clients, are expected to deliver ‘a strong recovery of revenues’. We have adjusted our estimates for FY24E to reflect the slight delay in workflow resuming for ZOO, but maintain estimates for FY25E, with a return to profitability.