Zinc Media Group plc ($ZIN)

Good morning, and welcome to the Media investor presentation. Today, we are joined by Mark Browning, Chief Executive Officer; and Laura M, Chief Financial Officer. en now hand over to Mark to begin the presentation.

Welcome, everyone. Thank you for joining us for this short results presentation this morning. So 2025, it was the most successful year-to-date for Zin Group, both commercially and creatively. We've now delivered 5 consecutive years of profit growth. Revenue is up 28% to over GBP 41 million. EBITDA has tracked revenue, which is very positive, up 27% to GBP 1.9 million and adjusted operating profit and profit before tax are also both up. In line with normal accounting rules, these are then adjusted. That's why they say adjusted profit for items like share-based payment charges, gains on disposals of fixed assets, acquisition costs, which we had some considerable ones last year and contingent consideration. Gross margins, very healthy. at over 40%, and we ended the year with a good robust balance sheet. Now putting these results in context for you, this slide here looks at the performance of zinc over the 3-year period -- actually, over a 5-year period. At the start of the turnaround plan, back in 2020, zinc lost nearly GBP 1 million at that adjusted EBITDA level and lost GBP 2.1 million at the adjusted operating loss level. So you can see on the slide, the swing over the last few years has been huge. There is almost a GBP 3 million swing over that 5 years, and that's doing the worst economic conditions in a generation. At the end of the presentation, I'm going to put this into context by showing you how zinc's performed against our competitors. So last year, we initiated a plan called One television, where all brands came together, operating under one Managing Director, one P&L, one production management team, one set of workflows: one pipeline -- it was a simpler business. We were able to take out some costs. We launched zinc distribution. Now that was built from the acquisition of Raw cut, bringing IP back in-house where you do intellectual property deals, you outsource them and the person you outsource to, the company takes 30% and if we can bring that in-house, that 30% is retained by us. We transitioned to an entirely new management team in the edge while delivering 5% revenue growth and we invested in establishing 2 new companies in the Middle East. This now qualifies us for new business opportunities while they do a lot of their business through tender portals in the Middle East and now also means we can employ staff in country. We targeted GBP 0.5 million -- sorry, GBP 500,000 of annualized savings, and we managed to find GBP 700,000 mostly from those restructures I've just alluded to earlier. Now returning series. They are the bedrock of any successful media business like ours, and we delivered 13 series last year, 5 of those were returners and 8 were new, which have the potential to return this year and in future years. Quality, I've talked about before, one of our Kitemark promises, many companies would claim it, how do you evidence it? Well, we evidence it by ratings, by returning series and by awards. And the edge for the first time ever, one agency of the year last year, putting the absolute best Kitemark quality award on their shelf. And then Zinc on a production company of the year for the third year running up against the big global brands, the BBC, Alger, ITV, all Three Media, Bange, all those companies compete too. Of course, awards don't move share prices but they are important for our people and for our clients. They like our soft power, they evidence the claim of being a high-quality place to work. So let's have a look at the numbers, and Laura will take us through the detail.

Thanks, Mark. So I'm going to talk in more detail about the financial performance under 3 banners, our overall performance and then looking more specifically at our revenue and margin mix and then the longer-term outlook. So as Mark has said, we're up across all our financial metrics this year. Revenue is up by 28%, but also we're up on all our key profit metrics. We also look at gross margins carefully. They are important to us because they demonstrate production discipline and good management of cost of sales. So our 44.5% gross margin performance last year was exceptional, and it was also driven by a one-off frustrated contract in 2024, without which our gross margins would have been 4.4%. And so this compares very well with our 40.5% this year in 2025, which is only slightly down, and this is due to our revenue mix, which I'll come on to slightly later. Finally, our cash last year was at GBP 6.3 million, and this year is at GBP 3.5 million. Now this is down related to a number of things, largely driven by acquisitions. Last year, we had received a large amount of money and cash advances due to the high level of revenue booked at the start of the year. And then we also made an acquisition-related payments in FY '25. And that -- and without all those investment-related movements, the actual net movement is about GBP 0.4 million. I also want to talk about revenue in more detail. We look at our acquisition revenue and our organic revenue. And pleasingly, this year, our organic revenue is up by 16% from just under GBP 32 million to nearly GBP 37 million. Now ROCA which was acquired at the end of 2024 and delivered GBP 4.7 million revenue this year and has exceeded expectations since we acquired it at the end of 2024. So that's in the context of a total revenue increase of 28%. Now this slide is important to this next slide, and I'll explain it going from left to right. This is how we look at our revenue mix and what drives our gross margin. So our revenue on the left-hand side shows that -- our TV business delivers 70% roughly of our overall revenue. And then our branded and content TV commercials business, about 30%, and there are different margins that those businesses achieve within that. So if you look at the next bar along, the edge can deliver very high margins at around 50% to 60%. Our distribution business tends to deliver between 80% and 90%. And then TV tends to be between 25% and 30%. They can obviously be range either side of that, but it's generally the pattern that we see. Next, let we look at revenue quality. So this is about returning customers who returns to us year after year, not for the same pieces of content or different pieces of content, but they come back to us because of quality and because of trust, and that's at 88% this year. And then finally, on the right-hand side, we look at geographical mix, so U.K. and Rest of World. And this is split between 55% U.K. and 45% rest of world. At the moment, our international revenues aren't necessarily moving at pace with our revenue growth, but that's because Wall cup, which is required in 2024 is largely a U.K. customer set. And then finally, I wanted to talk about our long-term trajectory, and this is looking back to where we -- from where we've come to where we are now. And the numbers really speak for themselves here. So this has been a story of turnaround and strong sustained performance over a long period and so we're starting 2026 in a great place due to the performance of 2025 with a growing base of commissions and growth in our key strategic pillars. But we're also focused on bottom line. So last year, as Mark said, we delivered GBP 500,000 savings GBP 700,000 savings, sorry, versus GBP 500,000 targets. And this year, we set ourselves our highest target ever of GBP 1 million in annualized savings. And so far, this quarter, we've already delivered over 50% of that target demonstrating we can consistently deliver on what we set out to achieve at the start of the year. Our aim is to continue to scale by investing in IP generating genres and growing our international revenues. And we feel that 2025 gives us a great basis start to 2026.

So let's look at some of the nonfinancial successes of the year, strategic and operational ones. Three, I'm picking out here. Selling our programs, selling our formats where we own the intellectual property that is called IP. It's a critical part of a successful content production company. Now we launched Zinc distribution to take more of this very high margin, this is a lucrative revenue stream in-house over the coming years. We have just over 4,000 hours of owned IP. That's our intellectual property generated just under GBP 3 million of revenue last year, and that is at 90% margins. Most of that library is currently sitting with third parties. They distribute it on our behalf and they take around about 30% before we see are GBP 3 million. So there is somewhere around GBP 1 million of opportunity which is all at margin that is currently sitting with third parties that if we sold ourselves, we could look to bring those in-house. So we're considering how we do that as we go through the next year or 2. Now we've launched Zinc distribution. As part of our geographical expansion, we set up 2 new companies in the Middle East in 2025. These company registrations allow us to register on portals, tender portals for new business opportunities. they were previously closed to us because we didn't have these company registrations. One is with Media City in Qatar. They're a government-funded body with a specific remit to develop TV production in country. So they can fund companies like us making television in country. And the second company registration is in Saudi Arabia, which now means we can employ local Saudis which is becoming a prerequisite for winning these tenders and winning business. And finally, we transitioned to a new management team in the edge following the end of their 3-year earn-out in the summer of last year. The edge grew 5% year-on-year and has performed well so far this year under that new management team. Now Zinc is a storyteller, retail stories about life, and we tell them on screen. But we also work hard at how we tell our own story. We certainly punch way above our weight in the product we have and in our profile, partly because we are publicly owned which gives us a platform that others don't share, but primarily because our programs speak for themselves and the people that make them. So we regularly feature, as you can see here, in National Press and magazines on radio and television in podcast and on social media. We provide you the investors with regular updates, webinars and newsletters. And if you are not receiving these, please subscribe via the website and visit the Investors section. Let's pull out some of our creative highlights. Our product really is in the best shape it's been in. Our programs are now, well, they're well famous and they get the highest ratings and they get a fantastic critical acclaim through awards like basters and we make them, as you can see here, for the world's biggest broadcasters and the world's biggest streaming platforms. More importantly, where are we going next? So the outlook ahead that's so on the pipeline. Laura, do you want to take us through this?

Yes, sure. So the pipeline is how we monitor progress in terms of booking revenue over the course of the year. And we have a total, at this point in time of GBP 30 million either secured or highly advanced in revenue. This compares to a number of 34 this time last year. So we're in good shape. This is a point in time metric for us, and it moves all the time, as you can imagine. We also have GBP 29 million of further opportunities in the pipeline, which is about double what we actually need to book our market revenue -- market forecast revenue for this year. Now, an important point to make in this that we've observed this year is actually the way that business is converting through the pipeline this year and the speed at which is converting in the start of the year. So if we think about our number at the start of February versus April, we've actually increased that secured and highly advanced by about 50% versus this time last year when we converted about 30% to 35%, so that shows us there's a really positive movement in the booking of the pipeline. That's despite some material headwinds, both in the Middle East conflict and also in terms of the U.K. production market at the moment. So that's a really positive momentum that we have going there. So this year, we're going to internally be reorganizing ourselves around what we're calling One Zinc. This is making our business simpler and more efficient to operate. So for historic reasons related to legacy acquisitions and historic structures, we've been structured a bit like a Russian doll where we've had the group and then inside the group, there are other businesses and inside those are other sub-management teams and so forth. A group with a sort of a series of other companies, each with their own management team and their own structure. And we are stripping all of that back now, partly because the big acquisition of the edge has finished its earn-out and that gives us a chance to restructure our organization completely. We're also seeing a competitive advantage in the marketplace, where we take the full firepower of the Zinc Group and deploy all of our people and our labels and our brand opportunities and our platform to the market, we are seeing market response being much more positive. So to do this effectively, we are removing lots of internal barriers, which means going forward, we're going to have 1 P&L where we've previously operated multiples. One new creative lead, which we have announced this week, deploying the best people to the best opportunity at any one time, one production management structure, simpler and cheaper finance processes and everything centralized via the Zinc platform. That means greater efficiencies, greater support for our businesses better deployment of resource and means we can, as Laura has alluded to, be confident in our GBP 1 million of savings that we're targeting for this year on an annualized basis when we come into next year. Now, AI, this comes up all the time now. AI, in our view, is not a threat to our business. It is an opportunity. We are using it across Zinc. So let me give you 4 illustrations. You can see them down the side of the slide, where we're using AI day to day. In development, we use it to improve our pitch material, our storyboards, our program development, that's at the ideation stage. When we're in production, we use it to make complicated scenes, which otherwise would be cost prohibitive. So we wouldn't win the work in the first place. Work is now becoming available because you can do production using AI. In post production, it's doing amazingly good things. It's shortening edit time. It's allowing us to transcribe content into different languages at different times and different pace. It's creating social media assets for us to market those programs and in turn, to monetize them. You can enhance audio and, of course, in central services in finance and elsewhere in HR, it can improve efficiency, and it can take out costs. So we are embedding AI across the group. But more than this, we see it as a growth sector, an area where we can grow our revenues. They are -- AI is a big part of the global economy. It's a boom industry, and they have stories to tell. We are storytellers. So in 2025, we won GBP 3 million of new business entirely from the AI sector. That included a large AI event that we produced a fully AI TV commercial and a training film via the edge, again, all made in AI. So 3 illustrations of a production company producing in AI, embracing AI and turning AI into a business opportunity. We may lose the odd piece of production work along the way but we're going to make far more from AI and the sector of AI than we are going to lose it. So 2026 is also about monetizing our group platform. We've talked about this for a number of years. All of our brands are supported by the central group platform. That provides specialisms that any of these companies on their own wouldn't be able to afford. And if they did, they'd have to go out of house and that would hit their margin. It's expensive for companies to do that if they don't do it in-house, but it also gives us a competitive advantage. It's why zinc when a company comes to us, we explain because you get the power of the whole group. It improves our sell and it allows us to retain our margins. Now we've built this, and we're using it ourselves day in day out and have done for a number of years, we are seeing opportunities to sell that to third parties. Post production, where we have spare capacity, we are able to sell our studios in our post facilities to other independent production companies and broadcasters. We have lots of kit, cameras, lenses, all sorts of things. We've launched Bumblebee kit which is our in-house kit provider. And marketing as well, marketing and comms, we're increasingly being able to sell that to clients alongside a piece of production they will offer want to distribute it, market it and communicate it and we sell those services. So that overhead that drives our business is increasingly being recovered through third-party sales. It's also investable in. When we talk to investors, what people like about Zinc is it has this core platform, which means we can scale. We can bring in companies. We can integrate them quickly. We can take out cost because we have our own platform. This year, we're also moving into IP exploitation more, including digital and podcasts. Traditional distribution is a big pillar. This is what we talked about last year. This is the first box on your slide. It's why we've launched the Zinc distribution. This is taking our programs and our formats and selling them as I've discussed previously. But we're expanding that out. It also now includes digital partnerships. So we're going to take our finished programs or we're going to reversion our shows for social video or for fast channels. If you haven't heard of a fast channel, it is a free advertiser-supported streaming television channel. It is a thing. And we can put our content on there, and we can receive revenue. So it's the same content, but it's new commercial opportunities, new revenue streams. And the third pillar is direct-to-consumer. We're going to make content, not be commissioned by a channel or a buyer, not by a third party, but we're going to make it ourselves straight to market. New content or potentially reversions of our own programs. Again, for social platforms, YouTube being the biggest which we will then own and operate those channels, and we will monetize our content through advertising. So this is minimal cost to us, but opens up entirely new markets. The pictures you see here from our -- some of our YouTube channels, which are currently run by free mantle entertainment. We outsource to them. And of course, there's a balance between when do we bring that in-house and in-source it ourselves. These strategic growth pillars are important. This is a critical slide to understand as an investor. We've got increasing confidence in our ability to accelerate our revenue growth again in the next few years, lots of organic initiatives where we're investing our own money into new markets. And last year, I set out 3 pillars for expansion. They were entertainment, Middle East expansion and IP exploitation. And I said we want to try and get $10 million more turnover over the next 3 years following the end of 2025, so 41% to 51%. We're going to try and get GBP 10 million more from these 3 pillars, and we operate, as you've heard, at 40% margins. So if we get GBP 10 million of new business, it's reasonable to assume it will average out about 40% and therefore, GBP 4 million additional EBITDA over the next 3 years. That remains our plan. In 1 year with all of them growing well. We're expanding the plan, and you can see that illustrative on here. The purple bars show the move from 41% to 51%. That still remains our base plan but there is more upside emerging. In entertainment, we're broadening that out now to become product diversification, not just entertainment, but now events. We've done our first big event in 2025 with pipeline of events is looking great for this year, but also digital, as I said. So we're still targeting that GBP 4 million over the next 3 years, but not just from entertainment. Entertainment itself has a pipeline of GBP 18 million. The pipeline for events is growing. We haven't got a pipeline for digital yet. So to do just 4, I would argue that the opportunity weighs itself towards the upside, which is shown on this table. Middle East expansion now becomes geographical expansion. Our Middle East pipeline is close to GBP 30 million. The size of the opportunity is only constrained really by the size of our investment part and our ability to service it. We're now adding U.S. expansion to this list. So we'll be continuing in the Middle East, but we'll also be looking at exploiting ourselves and moving to the U.S. So again, we've targeted GBP 4 million over 3 years. We will really, really comfortably do that and the opportunities to the upside. And then there's IP exploitation. This is going well. It's up 50% year-on-year from 2024 with traditional TV sales but we're also going to include digital exploitation within there. So very confident about the long-range forecast here and the opportunities for this media group to move into these new markets and continue to grow organically. So how do we stack up against our competitors? I alluded to this at the start when you saw the big swing over the last 5 years. I've said 4 years that Zinc -- last 3 years, Zinc has been outperforming the market quite considerably. And this chart evidences that in pure data terms. It compares competitors across the industry in the media space, both listed companies and private companies as well as large companies and small companies. And you can see Zinc here is the dark blue bar on the left of your screen. And it shows, over the last 3 years, as outcompeting all of the competitors, delivering an average annual growth rate of 16%. It is the highest performing media company in our peer group, outperforming the market. And you can see anonymize the competitors that we have looked at on the right-hand side. This morning, this was the headline in our trade magazine, leading on AI and entertainment. Zinc is a modern future-facing media group. We can be as elastic as we need to be to go where the opportunity is in the marketplace. We are storytellers, we make content, and we put them on screens and we can go wherever the market opportunity is, including in AI. So just to bring it all back to home. This is the investment case. It is a good time to join the Zinc story off the back of our best-ever results. For those that stick with the journey, stay with it because despite AIM's challenges, this is a high-performing company that in a normal market, would be being re-rated quite considerably based on the growth rates we're seeing and how we're outperforming our competitors. So we continue to grow our story, revenue up. We continue to outcompete the competitors. We maintain great relationships with the big brands and the big streamers in the world, there is clear visibility over the pipeline for this year's revenue, and we're growing our profits, both at EBITDA and at PBT year-on-year. Expanding into new geographies, Middle East and America, new genres, events and digital and entertainment and exploring as ever, other companies to bring into the group because we have the platform and the operational gearing ready for them. So it's a proven growth story, strong performance of excellence from which we can further grow and further scale. So thank you for your time this morning.

Thank you. We have had a number of questions presubmitted and submitted live. [Operator Instructions] Our first question is, why is your share price so low?

To start with an under arm, just bowl a gentle 1 then. I'll have a go. The share price is totally dislocated from the performance of the company. The company has performed consistently well for the last 5 years and has grown, as you've seen, and the share price has literally dislocated from that and gone in the other direction. So there is virtually now no relationship and even this morning, no reaction to the best ever results for the company in its -- in the city, in the share price. So why is that? Because the share register is under enormous pressure because AIM is under enormous pressure. So outflows are a big problem. If you look at our big investor base, our big institutions, we have Herald and Canaccord and Miton and Eden Tree and Ruffer. A number of those have had significant outflows for the last few years. Typically, they've had redemptions as well where they have had to service their investors. They're all supportive or wants to sell Zinc, but cash is limited. There's virtually no inflows into AIM and as a result, at the small end of AIM, there's just no investment market. It's a seller's market, not a buyer's market in that sense, there's too many sellers and not enough buyers. So prices are dropping. Just to put it into context, have a look at STV, ITV, Future, Zoo Digital. I can tell you, they're all down more than zinc down over the last 5 years. Some are down 70%, 60%, 40%. Zinc's down 36% over the last 5 years. It's not great at all, but it's better than most of our competitive set at all of our competitors. And then there's the herald challenge. We all know about it. It's in the public domain. Harold has this activist investor, Saba from the U.S. that is putting pressure on Herald too. So our shareholder register has its own challenges. So we need to talk about the company and how it's performing, and that is my job, which is to run the company and the investor register, which is clearly a responsibility of the Board and the shareholders, but there are 2 issues.

Thank you, Mark. Our next question is, why is Zinc bucking the trend in the market?

It's bucking the trend because it is a highly diversified group with a very clear strategy and I've explained most of that. You can see that we're diversified in product more than we've ever been. We're diversified in geographical location more than we've ever been, and we're diversified in price point more than we've ever been. We've got 12 businesses across the group. We like to have 20 odd. But 12 means that if we catch a cold somewhere or a market catches a cold somewhere, that we have got other areas where we can improve and grow. And we've seen that this year. And that's fundamentally the reason heavily diversified group with a very clear strategic plan.

Thank you. Next, we have -- can you tell me more about your strategic pillars and why you chose them?

So the 3 strategic pillars were Middle East entertainment and IP last year. We chose them because we are already operating and had already made organic investments in those. So we knew the spaces and we knew that if we accelerated investment, there was a high probability of being able to see a short-term return on that in year, and that's happened in 2025. We have our businesses in the Middle East with the modest investment we've made in launching these new companies new market opportunities open up. The pipeline is really exciting outside the U.K. That is a sector that is growing at 6.1%. The U.K. is now forecast to grow at only 0.8%. And -- so the Middle East is growing 6x faster. There is a hiatus at the moment. but that's why we're in that market. Entertainment, we've got a very small market share, and I've explained the IP and the opportunities in digital. When you're sitting on 4,000 hours of owned content, there's lots of opportunity to exploit that and commercialize it.

Thank you. And how confident are you in your pipeline?

Yes. Well, January was really slow. And I think we all kind of thought what is this year going to shake out like -- and by the end of February and since March and the start of this month, we've been really heartened by it, as Laura says. The conversion rate actually compared to last year, which was a really good H1. The conversion rate between February and April is 50% and last year it was $35 million. So we found that really encouraging internally. We're seeing incredible amounts of activity on our pipeline. Still got to get into production and get the business booked in the year. But to be GBP 30 million booked or highly advanced, when we say highly advanced, we mean it is contracting, but we have a pretty clear internal discipline unless it's contracted, it cannot be called booked. But you put them together because that's a phasing issue. And there's GBP 30 million against our market forecast already booked and highly contracted at 65%, and we're in mid-April. That's fine. We're in good shape in a tough, tough market.

Next, we have a few questions on the Middle East. So firstly, how is the war impacted Zinc business in the Middle East? And then any contract delays or cancellations?

Well, I'll answer the second one first because no contract delays, no production delays yet. And actually, we're in good shape. We founded a surprising amount of new business opportunities coming in. I expect us to be able to announce some large new contracts signed and going into production shortly. So that has been positive. If this plays out the way we all hope and comes to some sort of resolution over the coming weeks, it will impact our H1 numbers probably. But in a business of this size, we really shouldn't worry too much about H1 to H2 comparisons because it's very lumpy and bumpy, which you need to look at the whole year performance. So the big impact has been on our people, and it's been really difficult to manage people because they've lived through a war zone and they've had to live at home and be at home and work from home. It's very similar to COVID, has been. So it's been hard work. It's been distressing and it's been a tough management time. But financially and performance-wise, as I say, H1 might be impacted, but it may still may not, but it might be, but the year won't be at this stage if this is resolved.

You said that you've set up 2 companies in the Middle East, what are these?

They are -- well, the company registrations, their legal entities -- so 1 is with Media City. Now I mean in the U.K., there are funding bodies for TV. There's an organization called Screen Scotland. There is an organization called Screen Island and Screen Northern Ireland. There's a similar 1 in Wales. So those are local government initiatives designed to attract business into Wales and Northern Ireland and Scotland. So they give grants, we do it in this country to try and move business into those nations and out of London. So they're following a similar model, and Media City is designed to bring international businesses like ours where we have good ideas, world-renowned producers and our own IP and generate a creative economy in those countries. So Media City is designed to generate a creative economy in Qatar. And they have funding, they can fund up to 50% of productions themselves and they can give you rebates, i.e. alone for the other 50%. And before you've even found your distribution outlet, providing you make your program in country. And to make a programming country, you've also got to have a company registration. So we've set all this up, and we're having lots of conversations about taking our business to that country, delivering for them, hiring local people, making local production, which they will fund -- and then we will be able to sell. And if they give us a loan or a rebate, we pay back through our sales. So that's how we've done it. And the same in KSA. We have to hire local people now. That is part of their creative economy initiative. They want to see local Saudis employed. So you have to have a company registration for that. So that is an investment we've made. It's a modest investment. It's 6 figures of investment, but it's still an investment that will open up new doors, and we start to see that pipeline emerging, which you've seen on those pillars over the next few years.

We just have another 1 on this topic, which is -- could you give some more insight into how the online tendering process works in the Middle East? And how is the feedback loop versus more traditional?

Yes. So they tend to tender everything actually. I mean the -- in some markets, there are dozens of tenders coming out of a day. But -- so they -- if you're registered, you get a chance to see everything. And what's quite good about tendering is you know that there is a buyer with a need. So in that sense, it's better than the sort of totally human interaction where someone is considering a need, and you've got to try and convince them. They typically have the need identified, they've thought about it through, so it has gone on a portal. The competitive set in some of our markets is not particularly competitive. So you're probably up against 5 or 6 others. So not only do you know that somebody wants something that they thought it through and they've got a budget attached to it, but you've got a 1 in 4, 1 in 5 chance of winning it. That tends to be how it works. I mean it has its own vagaries and brief change and so forth. But it's a fairly transparent system of procurement.

Our next question is, can you tell us more about your M&A prospects?

Shall I pass that to you so I can have the break?

Sure. -- we have made 2 very important acquisitions in the last 3, 4 years. So the edge we acquired in August 2022 and raw cut in October 2024, both outperforming expectations at this point in time. So that's a really strong performance in terms of acquisitions. And therefore, we would like to make some more. We manage a pipeline of acquisitions of different sizes and different types, different markets. And so our intention, given that we have this strong base of this platform that we can lock acquisitions onto and really help integrate them and help them accelerate their performance. We are always looking at what opportunities there are out there depending on scale, where they fit in terms of our overall portfolio. So that would be the plan looking forward. I think it just depends what those opportunities are.

Thank you, Laura. Our next question is -- can you explain more about Zinc distribution and how you make money from IP?

Yes. make money from IP in broadly 2 ways. You sell the format or you sell the program or you sell both. So when you've developed an idea in the U.K., if that idea is commissioned by public service broadcast or BBC ITV Charter, Channel 5 under the regulations in this country, the production company owns the IP outside of the U.K. And that is the format, the idea and the show itself. So you then take that show, we'll use the in a circle for a case study. It's an entertainment Quisshow on BBC on Saturday nights hosted by Amanda Holding. It's got a format of 3 rounds and different game plays and then some jeopardy at the end. So that is a format. We own that because we created it, and BBC Studios are currently selling it. So they will then take that to international distribution markets around the world. saying there is this new BBC one show would you like to buy that as a format? And then a bigger U.S. broadcaster or Canadian broadcaster or Australian broadcast or Saudi broadcaster might go. We need a new quiz show. We'll buy that format, please. And then they'll make that version of the show with their own version of Amanda Holden and their own contestants to their own questions, but they'll follow the format and we get our payment after the BBC have taken their commission typically 30%. That's format sales, or the show itself presented by Amanda with our questions and our contestants might sell around the world in other English speaking will be translated into other languages. But what you need to do that is they have to know that the host and the games and the questions also transport to other territories. And that's why mostly we sell formats. But it's not just that. It's then exploiting that digitally as we do on YouTube and on fast channels, which is an entirely new way of building from the same cost base, additional high-margin income, and that's part of our expansion plans over this year and next.

Thank you, Mark. Next, we have a couple of questions on AI. Firstly, what are the impacts of AI? And how are you going to incorporate AI into your offering?

Well, I hope I summarized this. AI is an opportunity for us to open up new markets. I see it more as an opportunity than a threat because it's a fast growth sector with lots of content need to be storage to be told, and we do that. Internally, it is taking us into faster, more efficient workflows, different types of production, and it's enabling us in time to take out cost and speed up processes. So I genuinely, I'm an enthusiastic, I think providing that we have the right checks and balances. Ultimately, our brand is driven by this trust and quality Kitemark. And when you're commissioned to make the most sensitive TV programs, you've got to be careful that you're also not drifting too much into artificial content creation. But that's about having good governance, good processes, making sure that we own all of the content, the IP, even if it is AI generated. So that's about using the right platforms and the right AI engines so that the proprietary content remains the property of zinc and not an AI engine.

Thank you. Our next question is, any plans for -- sorry for dividends or share buybacks in the next 12 months?

Well, our institutional investors are saying, if you had the choice, to buy back shares or invest in growth, investing growth. Now it's attention, but it's an intention because the market at the moment isn't valuing growth, it's only really -- it's hardly valuing much am anyway. So the advice from our investors, we follow is if you've got the opportunity to use your cash to deploy it, for future growth rather than share buybacks. Because the share price and the share register issue is dislocated completely from the company. And the Board is wrestling with it with the shareholders. My job and Laura's job is to take the right decision by the best interest of the company and the business over the medium to long term. So where we have cash, we invest it in growth. The second part was around the second part about second question. remember now. share buybacks and dividends. Well, at the moment, there are no plans for dividends. I mean we've got to pay Herald debt, still GBP 3 million of debt to pay back, which predates -- I can't remember me and probably 3 of my predecessors. So that is the -- which is starting to be addressed. So once that's cleared, I think we can be confident of starting to think about dividends, but we need to go in order of those things. And this is why I go back to the turnaround. A GBP 3 million swing over the last 5 years has finally got us to a position where we can pay down debt, and we can start to see in the horizon that there may well be that kind of thing over the coming years. If we deliver this growth plan, once we're up to GBP 50 million, then we'll be kicking off substantial amounts of cash where we can have a realistic conversation about that.

Our next question is, you've highlighted the current pipeline or order book how much of next year's revenue is already effectively locked in as of today? You want me to take this?

Yes.

So as I went through in the presentation, we have GBP 30 million of revenue, which is secured or highly advanced by nearly contracted at this point in time. That compares to GBP 34 million at the same point this time last year. And we feel last year, actually, we were saying that we were -- it was a highly -- we were ahead of where we'd ever been actually in terms of secured and highly advanced at 34%. So we're pretty close to that number this year. So that feels like a pretty good place to be at this point in time. And then we have a market forecast of 45%. So we have a little way to go, but we have about GBP 10 million in advanced, so moving from that advance to highly advance is the next critical step. So converting that pipeline. But as we said before, what we've seen in the last couple of months is a really good rate of conversion from the engaged discussion, which is one of our metrics through advance into highly advanced. We feel positive about being able to book the remainder.

Thank you. Our next question is profits look better, but is that the new normal now? Or did a few things just go your way this year?

It's the new normal. Next question?

Our next question is you've got cash in the bank now, what's the plan by companies, invest or eventually pay a dividend?

All of it. So we -- it's always a fine balance. In this market, actually really tight cash management is critical. -- because we're all experiencing the same ridiculous journey. I'm not quite knowing what we're waking up to in any one day. So we absolutely have to maintain very tight cash management, and we are. So it's about a cautious, prudent, balanced approach to how we deploy cash. And all of those things need addressing all in their priority order. But maintaining -- first of all, maintaining the business growing the pipeline, using our cash to convert near-term opportunities, which in turn, we have a little test internally go, is this decision going to be cash generative in year. Ideally, the answer to those is always yes. It can't always be the case because you always going to look at what next year is. So that's one of our first and most important priorities is about decisions to deploy resources that are themselves cash generating in the year. And then as we go out using cash to help fund acquisitions that would also go through the same test. If we deploy some cash at the start of the year for an acquisition, is there a reasonable chance a better chance of being cash generative towards the end of the year from that deployment. And the dividend question I've already answered, which is it's on the radar, but let's address the underlying profit of the business first. Let's get to that next stage of growth. Let's address the debt issue and then we can address the dividends.

Our next question is, to what extent do you feel capital constrained versus the opportunities in the Middle East?

I think the opportunities in this last year, having worked so hard at that as a company, there is actually a growing frustration that if we could deploy capital faster, we would see better returns faster too. So yes, I think that is a genuine conversation to start having about -- we are so far ahead of our competitors. Everybody is trying to do what we're doing out there. We know 3 competitors who are in the marketplace. But we've had 20 years in that marketplace. We've had 10 years working in those countries with people in country. We have company registrations. We've got 3 companies registered, 2 in Qatar, 1 in KSA. We want to register 1 in UAE where we're seeing event opportunities. And I think if we do that, there are significant millions of pounds, tens of millions of pounds of opportunity if we could deploy capital faster. But it's a balance.

Our next question is, have you pitched something recently that you thought there was a surf hit and it still got rejected and why?

Recently, definition of recently, in the last year, have we pitched? Yes, there are a number of shows -- I mean, I can use entertainment for this actually. The level of our entertainment pipeline, the ideas on our entertainment pipeline are fantastic. And the one that's just come to mind is we've been working for 6 months with a U.K. broadcaster. And the decision was due to be this week on something that we thought was really, really likely. It wasn't in our highly advanced gate, but it was in our advanced gate. And the broadcaster has said, actually, it was the downgrade of the U.K. economic forecast that killed it. And that's just a context. Kraken idea that the broadcaster wants -- but this broadcaster is looking at their advertising income and the state of the U.K. economy and has gone, let's pause this for a minute. So it's not the idea. It's -- the market is I mean it's terrible. Let's just call it for what it is in this country. But we're outperforming because we're not beholden to this country. We're moving into new markets.

Thank you. We are now moving on to our final question for today. [Operator Instructions] The question is, -- if revenues ramp as guided, the margins naturally expand order costs rise alongside.

Depends on the revenue mix. In that slide we showed, we tried to give you the sort of illustration of the type of revenue mix and the type of margin mix. If we find we hit a really sweet seam of business in IP exploitation will flow through to the bottom line, which is why we've got all of these things in play. If we find actually the opportunity is that we need to do big events where the margins will be lower, but the revenue would be higher, then again, that would affect the amount of margin. But broadly work on the assumption that in aggregate across all of our portfolio of businesses, we average a 40% gross margin. So if we bring in GBP 10 million more, we should see GBP 4 million of that flow through to EBITDA level, all things being equal. We will be able to increase costs because that's built into the 40% margin. And that GBP 10 million means GBP 4 million of EBITDA, which takes us to GBP 6 million in total on the number we're on today, which would see us generating well, best part of GBP 4 million of cash. So this is the next critical stage. This is where it starts to get really interesting now. Between the 4 mark and the 50 mark on our turnover and our scale, there's a lot of impact on the bottom line, positive impact.

Thank you. We currently have no further questions. I'll hand back over to the management team for any closing remarks.

Well, I'll summarize by going -- look at the Zinc's journey that Laura showed the 5-year journey that turnaround. Look at the profit swing over the last 5 years. Look at the performance of Zinc outperforming competitors with an average growth rate of 16% over the last 3 years. Look at the conversion of EBITDA to operating profit and look at the possibility in the future of growing from GBP 40 million to GBP 50 million through these growth pillars that we've laid out the probability of success was weighed towards the upside, I believe. Despite the difficult market conditions and despite the narrative that we've tried to debunk today that things like AI are a risk, they are actually an opportunity. So with the share price that we all know is the lowest it's been in a decade. As all media stocks are, it's about timing. This is for me a good time to join a story like ours.

Thank you to the management team for joining us today. That concludes the Zinc media investor presentation. Please take a moment to complete a short survey following this event. A recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.