Zinc Media : Annual Report And Accounts 31 December 2022

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The Group is pleased to report excellent progress for the year ended 31 December 2022 ("FY22"), including the following highlights:

Financial Highlights

• Revenue and Adjusted EBITDA1 ahead of market expectations, with the Group profitable at Adjusted EBITDA level
• Revenue increased 72% to £30.1m (FY21: £17.5m) and marks the highest revenue the Group has generated in the last ten years
  o Organic revenue growth of £6.8m or 39% year-on- year, reflecting the investment in new businesses and contracts
  o H2 revenues increased 83% to £19.2m (H2 2021: £10.5m)
  o Approximately 80% of revenue was delivered from existing customers, up from 69% in FY21
• Adjusted EBITDA of £0.1m, compared to a loss of £0.6m in FY21
  o Strong H2 2022 performance with Adjusted EBITDA of £0.7m
• £3.6m of cash at 31 December 2022 and £4.6m as at 19th April 2023
• Loss before tax of £3.3m (FY21: £2.6m) is largely driven by acquisition costs related to The Edge acquisition in the year and amortisation related to previous acquisitions

Operational Highlights:

• The successful acquisition of The Edge in August 2022 has brought a quality, high margin business with significant repeat revenue
• The Edge is performing ahead of acquisition expectations, having achieved its best ever trading performance last year, generating £13m of revenue and £1.3m of profit before tax (of which £5.8m of revenue and £0.7m of profit before tax has been included in the Group's consolidated results)
• The acquisition of The Edge has added considerable scale to the Group, with pro-forma revenues for the enlarged group of £37m in FY222
• The Group has been awarded "Production Company of the Year" at the prestigious New York Festival Film and Television Awards

Delivering a number of significant programme successes during the year:

• Highly acclaimed documentaries that led the news agenda and got the nation talking include Putin vs The West, Tom Daley: Illegal to be me and Afghanistan: Getting out for the BBC
• Zinc's largest ever volume commission, Bargain Loving Brits for Channel 5
• Programming with fresh talent and from new buyers such as Unprecedented for Discovery+, Space Jump for Red Bull, Martin Compston's Scottish Fling for BBC, Spooked Ireland for Really, Naughty Tories for Channel 5 and
  Sunday Morning Live for the BBC

FY23 Trading and Outlook:

• The Group is trading strongly with £26m of revenue already booked and expected to be recognised in FY23 (7 February 2023: £15m)
• In addition the Group's pipeline remains strong with a further £6m of revenue at a highly advanced stage
• Together this provides the Board with confidence in delivering the FY23 market expectations
• Integration of The Edge is progressing well: cross- divisional business development opportunities have been identified and the planned co-location with Zinc's other London businesses later this year will enable cost savings and further synergies

2022's results reflect a transformational year for the Group. The Board is delighted to see revenue grew 72% overall to a ten- year high, powered by excellent organic growth of 39% and a strong Adjusted EBITDA performance of £0.7m during the second half, plus the successful acquisition of The Edge Picture Company ("The Edge"). This follows huge amounts of hard work and is a much improved performance on the prior year.

The strong growth delivered by the Company and the high level of revenues delivered from repeat customers provides the Board with confidence of sustained Adjusted EBITDA profitability. The Board is pursuing a strategy built on strong organic growth, supplemented by selective acquisitions, to deliver long term profitable growth. The Group has continued to invest in talent and new business opportunities that are resulting in numerous contracts and should lead to growth and profitability in 2023 and beyond.

The acquisition of The Edge in August 2022 has been a strong addition to the Group. It has delivered record financial results in its fourth quarter, helping the Group to report strong H2 profitability. The Edge entered 2023 in a good position with record pre-booked revenue. Cross-selling opportunities and integration into the wider Group is progressing well and cost benefits will be realised with the planned move of The Edge from its current premises in Covent Garden into Zinc's London headquarters in H2 2023.

The Group continues to deliver world class television and brand content. Putin vs The West grabbed the news headlines across the world when it was first broadcast in early 2023. Afghanistan: Getting Out gave the inside track on the chaotic withdrawal of western forces from Afghanistan and Bowelbabe In Her Own Words provided exclusive access to the final days of Dame Deborah James' battle with bowel cancer. In addition, Zinc has produced hundreds of hours of television for all the main UK and many international broadcasters including Zinc's largest ever volume commission for Bargain Loving Brits, and brand content produced for companies including Red Bull, EasyJet and Lego alongside large multi-nationals in the FTSE100, government departments and NGOs. The Company continues to receive notable endorsements for its quality of production and programming, most recently winning "Production Company of the Year" at the New York Festival Awards.

The Board would like to thank the management team, the employees and freelancers for their professional and dedicated work, as well as our shareholders for their support in what has been a year of strong progress.

Christopher Satterthwaite

Chairman, Zinc Media Group plc

25 April 2023