Zinc Media Group plc (LON:ZIN) Chief Executive Officer Mark Browning caught up with DirectorsTalk to discuss their latest trading update, expecting FY22 to be ahead of forecasts, the large increase in booked and anticipated revenue and how The Edge is progressing.
Q1: First off, congratulations on the trading update announced today, can you just take us through the highlights?
A1: So, we are expecting FY22 to be ahead of forecast at both revenue and adjusted EBITDA level, and that will include profitability for the second half of the year, it’s always the second half that tends to be our biggest. In the FY22, we also had four and a bit months of The Edge in the group so that helped the second half which is always our strongest any way.
FY23 is looking very good at the moment, we’re starting the year with the largest amount of pre-booked revenue certainly in my time as CEO, on £15 million and that compares to £9 million at the same time last year. So, it’s a good position to be in.
We’ve got a really good pipeline at the moment, there’s £12 million of business that are either at a contract stage or certainly very highly advanced with our customers. That’s twice the amount that we had at the same time as last year. So, both pipeline and booked revenue significantly ahead as we go into 2023.
Balance sheet is pretty strong, just under £4 million of cash so we’re looking quite tidy at the moment.
Q2: You mentioned that you’re ahead of market expectations for revenue and EBITDA, what were those expectations?
A2: For FY22, the forecast was upgraded back end of last year, November we did our last announcement to deliver £28 million of revenue and a small loss at adjusted EBITDA level, about £300,000. Today, we’re guiding that we expect to beat those forecast both at revenue and the adjusted EBITDA level.
For FY23, the forecast still stands at £36 million revenue and £1 million of EBITDA profit.
Q3: You stated that £15m revenue is booked and anticipated to be delivered in FY23; it is a large increase from the £9 million in FY22, what is that down to?
A3: A few things, so the TV business is doing well, Tern TV starting the year in production on ten returning series, and obviously returners are critical to momentum, so to be in production on ten is significant.
Red Sauce is doing very well, they’ve got their first commission for Channel 4 and they’ve got another returner again with UKTV and a lot of the increase going into this year is from The Edge who start the year with a record amount of pre-booked revenue for them too.
Last week, our Brook Lapping TV company, they broadcast their latest documentary which is called ‘Putin vs The West’ on the BBC.
So, all around the group, we’re doing well and it’s a timely reminder I think that when a company like Zinc Media leads the UK news agenda, it’s just a reminder that we produce some of the world’s most talked about television.
Q4: You mentioned The Edge, how are they performing and is there anything you can update us on there?
A4: For those that don’t know, they joined the group in August last year as part of our latest acquisition, and they had a spectacular Q4, a really good Q4.
They’re strong performance in Q4 came from across the range of their products actually, it did include a significant production for an agency called McCann, they also did some big productions with their e-learning, their e-learning business is growing pretty fast.
They’re getting good growth from their long-term clients and, as a result, their pre-booked revenues are well ahead of where they’ve been historically.
Integration wise, that’s progressing well. We’ve only had them in the group for 6 months so as the year develops, we’ll report more on how we’re getting benefits and they’re getting benefits from being part of Zinc Media Group.
