Zinc Media Group PLC

LSE:ZIN

Earnings Call Transcript

[Unknown Executive]

[Presentation]

[Mark Browning, executive]

Welcome, everyone. Good morning to you. Thank you for joining us for this short interim results presentation. I'm Mark Browning, the CEO of Zinc Media Group; and I'm joined by Will Sawyer, our CFO.

As I go through the presentation, all the images you see on the screen are from our programs. So this one is taken from our hit BBC series, Rob and Rylan's Grand Tour. Now Series 2 is launching this Sunday on the BBC and on iPlayer. If you want to pass your news agent put down to [indiscernible], you will see us on the front cover of The Radio Times, The TV Times and all good listing magazines.

So the results are our best H1 results for many years, certainly since I joined Zinc in 2019. In H1, we expanded further into new production genres, including into quiz formats, entertainment series and event production. We're now winning work at an unprecedented scale for the size of our business. We've won 10, GBP 1 million productions in as many months, and that is a record for Zinc.

We're getting national and international recognition for our work, which I'll share with you in a moment. And the picture here in front of you is taken from the set of our new prime time BBC quiz show, The Inner Circle, which is going to come to your TV in the next few weeks. It's presented by Amanda Holden. I'll pick up on that again in a moment.

So revenue in the first half of the year was GBP 22.9 million, which is a very big swing on H1 last year. This is due to us winning really big shows at the start of the year from January. The new quiz for the BBC, a new entertainment format also for the BBC. We filmed a big blockbuster factual series called Top Guns for the Disney+ Channel, National Geographic. And a big event production for the AI company, G 42 in the Middle East, which was produced in May.

That's all driven the record EBITDA performance, just under GBP 1 million of profit in the first half of the year. Again, a huge swing on H1 last year. That, in turn, has flowed through to profit before tax, first time we've delivered operating profit in an H1 period. We are normally very much back end of the year weighted. And cash remains good, almost exactly the same as it was this time last year and continues to give us that strong balance sheet with which to invest in further growth.

So as things are looking good in the first half, looking good in the second half, too. We've secured GBP 38 million of business. We did GBP 32 million in the whole of last year. So we've got line of sight of GBP 38 million, and we have GBP 4 million more, which could still land in this year. It's at a highly advanced stage on our pipeline, and more on the rest of the year and the outer years in the years ahead. Will?

[William Sawyer, executive]

Well, so to add a bit more color to the numbers for the first half. So revenues up 72% year-on-year to almost GBP 23 million, and that is driven by TV revenues, which have doubled, more than doubled to GBP 17.6 million. And that is, in turn, is due to, firstly, the acquisition of Raw Cut in Q4 of last year. And secondly, significant production activity in the first half on 6 of those multimillion pound commissions that Mark just mentioned.

Revenue from content production, which encompasses brand and corporate film production by the Edge, marginally increased to GBP 5.3 million, but that is expected to increase significantly in the second half driven by the delivery of a multimillion pound documentary in Saudi Arabia.

Gross margins are down temporarily due to investments in strategic growth, which I'll explain further in a minute. Additional overhead investment of GBP 200,000 was made in new growth pillars in the newer entertainment TV business, Electric Violet, which was launched in the second half of last year. And in the Middle East, where we are gearing up to open an office in Saudi and we've invested in significant business development. And across the full year, these investments will total GBP 400,000, and we will then start to see a return on that investment next year.

So given the short-term reduction in gross margins in the first half of the year and the investment being made in growth initiatives, it's really pleasing to have generated almost GBP 1 million of adjusted EBITDA profit in the first half of the year.

So on to gross margins. So gross margins in the period were 37%. So the year-on-year reduction reflects a strategic decision to expand into new areas, and that compresses margins in the short term, but it underpins the group's medium-term objective of delivering GBP 50 million in revenue and GBP 5 million in EBITDA by 2028.

Now a comparable strategic initiative was implemented in 2022, when the group increased the volume of lower-margin television revenue to facilitate entry into new TV markets. And now this year, the strategy is investment into entertainment programming and formats through the newly launched Electric Violet label, a prime time quiz show, and large-scale event production. And although these initiatives have resulted in lower gross margins in 2025, margins are expected to improve in future periods as high-margin IP revenues are generated from international program and format sales, but also that the primary production margins will increase as we get those shows recommissioned. And in 2026, we expect margins to return to over 40%, which will add GBP 0.5 million to GBP 1 million to the bottom line.

[Mark Browning, executive]

So our strong H1 results have driven [indiscernible] through exceptional new business wins on these big productions we talked about. I want to take you through a few highlights of those. The image here on the screen is from our huge event. It was an event production in May in Abu Dhabi, GBP 2.5 million production, created, designed, delivered by Zinc, over 300 crew, 1,000 delegates. You can just see the little heads on that image, and that big screen, one of the world's biggest LED screens. I urge you, if you haven't yet, go on our social feeds, on Instagram, on LinkedIn, on our website, and you can see much more about this event and the footage that we shot there.

So Zinc is world famous, its world-famous for trusted storytelling and high-quality program making. That's why global streamers, the world's biggest brands come to us for their content. And we evidence this promise of quality and the promise of trust through a number of different ways. Ratings, how our shows perform, peer reviews, repeat business, clients coming back and awards. If you've not seen Live Aid at 40, I urge you to go on the BBC iPlayer and watch it. You'll hear from presidents and prime ministers and those who change the world through the Live Aid event. They all spoke to us. That is the power of the access and the trust that Zinc companies can bring. It's absolutely smash the ratings on iPlayer.

If that's not your thing, maybe the documentary series about the conflict in the Middle East, in Gaza, it's also on iPlayer. That has been critically acclaimed pretty much by every reviewer described as a vital viewing.

Then there's returning series. They are the backdrop of our TV business. We want clients to come back and recommission series on our access series. Police Interceptors is made by Raw Cut is now in its 24th season, and we're looking forward to being commissioned for the 25th in 2026.

Then there are awards. These are important for our clients, and they're important for our staff. People want to know they're working for the best production company in the country. Everyone wants to be the best, and our series, Rob and Rylan's Grand Tour not only smashed the ratings, but it was instantly recommissioned for Series 2, which is the one that launches on Sunday. Series 3 and is going into production in October, and it won the BAFTA this year for the best factual entertainment series. So that is our product. That is our promise. That is what drives these commercial figures.

And to underline our promise of quality, we won a production company for the year for the third year running. This is an international award at the New York Festivals. This is entered by the BBC and by [ Balaji ] and U.S. broadcasters, and it's a production company of the year. It's given to the company that wins the most awards across most categories. So it really is a great case of the rising tide is the winner here. You have to outperform your peers to win this one. And we won it 3 years on the trot.

So that was H1. Excellent performance by every test, creatively, commercially. But H1 is behind us. So let's turn to the future, the rest of the year and the longer-term outlook.

[William Sawyer, executive]

Okay. So in terms of this year, we have currently won the GBP 38 million of revenue that is expected to be booked and recognized in FY '25. And that is GBP 7 million higher than at the same point last year. We've also then got a further GBP 4 million that could be recognized in 2025 that is in highly advanced discussions. We've got another few million that is set in lower parts of our pipeline as well that could well come to fruition this year, too.

So having already secured GBP 38 million of revenue for recognition this year, that puts us on track to deliver GBP 43 million of revenue in the full year, and that would represent a 35% revenue growth year-on-year.

[Mark Browning, executive]

Now earlier this year, I outlined how I felt we could take Zinc to the next level of growth to the GBP 50 million turnover mark. And there are 3 growth areas, which will get us there. First is diversifying into entertainment. Second is expanding our existing businesses in the Middle East. And the third is generating this high-margin IP, intellectual property revenue, revenue generated from our ideas that are sold around the world. And I want to give more detail on each of these because they're critical pillars.

So I've targeted generating an additional GBP 10 million over the next 3 years from these 3 verticals to take us from 40, 43 to 50. But the important thing to understand is that 2 of them, as you can see on this chart in front of you, have the potential to deliver that GBP 10 million target on their own. The reason I share that is because we all have to believe that targeting GBP 10 million to go from 43 to 53 is realistic. And arguably, given that 2 of these have the upside potential to do that on their own, this is a realistic target with opportunity to the upside.

So all these initiatives are in play. They're not just ideas. We've started them. They're all underway and significant progress has been made on all of them in the first half of the year. So let's take each in turn. Entertainment first. In the first half of the year, we won and produced that first-ever quiz format, The Inner Circle for BBC ONE. It's a new format. It will air this autumn ahead of the BBC's biggest shows. First series is a limited run. Typically, the first commissions in these new programs are limited runs by the broadcaster. It was a commission worth GBP 2 million. If the show rates well and is a success, the BBC will, hopefully, come back for more, and they potentially will come back not just for more of the same, but more episodes. So we are continuing to invest in that space.

We're also investing in a new entertainment label, this Electric Violet label that has the sole focus of moving Zinc into big, lucrative entertainment formats, which can then generate high-margin IP in future years following their commission in the U.K. We want this label to win these large prime time entertainment formats for the likes of BBC, ITV, Netflix, Apple, and we have ideas in with all of those channels and those streamers. We're being paid through Electric Violet to develop a potential entertainment format for prime time BBC ONE. It's very early in discussions at the moment. The idea has got a long way to go. These ideas will take a year, 18 months. I mean the quiz took 2 years to be commissioned.

And while we're in this investment phase, we track progress. We don't just blindly invest. We set KPIs to give us a clue and a steer as to how these investments are going. So in the case of a pipeline, we will track how a program is progressing through our pipeline. We'll track progress with the clients. We'll track feedback. And there's GBP 11 million of potential business for Electric Violet on our pipeline. We don't report it. It's not highly advanced in the numbers you see, but it sits across the pipeline in early discussion, all for '26 and '27.

The next pillar of our growth is expanding into the Middle East. We have businesses there already. We did GBP 5 million from this region in the last few years, and we're targeting doubling this to GBP 10 million by the end of 2028 to go from GBP 5 million to GBP 10 million.

In H1, we booked, recognized GBP 4 million from Middle East business. And this year, we're on course to deliver GBP 8 million from the region, GBP 8 million it this year, we're targeting GBP 10 million by the end of 2028, GBP 10 million feels feasible and realistic. We have an existing business in Doha, in Qatar. And we're setting up a second company in partnership with Media City in the country, and Media City invest in media productions in film and television. They sometimes co-fund, they sometimes fully fund. And in the first half of the year, we also invested in in-country teams. We've expanded new business development winners. We have expanded our office in Doha, our existing office. And in H2, we are opening this new production center in Saudi and relocating a U.K. business winner into the country.

And just like the entertainment initiative, we're tracking the progress through our pipeline, and we currently have GBP 10 million of active conversations in very early discussion, further deep down in our pipeline to support trying to get another GBP 2 million or GBP 3 million from this over the next 3 years. That tells me that we've got the right plan in place.

And the third pillar of the growth is to generate this high-margin IP revenue for this intellectual property. In H1, we launched our first dedicated YouTube channel using our back catalog of content from the TV businesses. We've been in for 20, 25 years. We think this can generate a few hundred thousand pounds of high-margin income in the near term. Channel is being sold, being monetized alongside other channels operated by Freemantle.

We've signed an agreement with BBC Studios to sell our quiz format globally. That's the quiz format that launches in a few weeks' time. So they'll start selling that in the autumn of this year, ready for next year. And we've invested in cataloging our library of programs, which now stands at 4,500 hours of owned IP that we've generated over the years. We've got a small team of people, which we're investing in, looking at how we build this catalog, how we monetize it, how we repurpose it for new markets.

And finally, working our plans to launch products direct to consumer, new content strands, repurposing this IP, this 4,500 hours, and that's likely to be in 2026.

Now this slide illustrates how owned IP can generate high-margin income. It's not a forecast. It's not based on anything. It's illustrative. But it gives you a flavor of how IP can generate high-margin income. When a program is commissioned and Zinc owns the IP rights outside the U.K., it can sell those formats around the world.

And the purple bar here is what might look like for a Series 1 being sold. You can see. Typically, there's no IP revenue in the first year at all because the program has to launch, it has to become a success, and the sales team have to take it to market. You get a little income coming in year 2, and then it builds thereafter for a few years before the first series has been sold and starts to tail off. If it's successful, though, a second series in that time is being commissioned, and that follows a similar trajectory and the third and so forth. And you can see that the numbers start to get quite meaningful if a program runs for 3, 4, 5 years, allowing revenues for multiple series to build and then flow back to the producer.

Given our profitability levels, around GBP 2 million, it is conceivable the IP, this high-margin IP, could add GBP 0.5 million to GBP 1 million over the years ahead if some of these investments in these formats come through.

So this brings us back to our long-term growth potential. As you can see here, we're currently well placed to do our GBP 43 million revenue forecast. We've taken you through the pipeline. Then there are the 3 growth pillars giving this runway, this path to GBP 50 million. And as our revenue grows, we get the benefits of operational gearing, our EBITDA will grow and our EBITDA margins, which you can see on this slide. We've already taken the company since 2019 from GBP 20 million and consistent losses to GBP 40 million and the highest profit last year and the highest H1 profit this year. So I'm confident that we'll deliver this in the next few years.

Let me talk you through if you're a new potential investor thinking about investing in Zinc. We operate in really large markets and we have a very small market share. We are less than 2% of our markets. And the critical thing, therefore, to take away is that we have headroom to grow even in what is still a sluggish economy.

We've got a really solid balance sheet, which can support these organic growth initiatives, which we've talked about, and we've detailed the investments we're making and the pounds we're putting into these investments. And we have improving profitability, which is allowing us to reinvest.

We are running the business for long-term growth. We are not running it at the moment for short-term maximum profits. We are reinvesting while we grow our profits because we want to grow to a much bigger business. And we have an enviable shareholder register, long-term institutional investors all aligned behind this narrative. Actually, pay less attention to half years to individual years. Look at the trend from 2020 to 2024, and the map we're laying out from '25 through to 2028. We are highly diversified. We've got very low revenue concentration, and we are increasingly operating on a global footprint.

Thank you for listening to us. Now it's your chance ask questions through the portal, and we'll happily take those and see where the conversation takes us.

[Operator]

[Operator Instructions]

So first question, of the GBP 38 million revenue secured for recognition in FY '25, how much is already contracted, conditional or at risk of cancellation?

[William Sawyer, executive]

Let me take that. So it's all contracted. We book our revenue in our accounts. We recognize it based on production activity. So that GBP 38 million is absolutely contracted, and then we are expecting, based on the delivery schedules, the production schedules that, that is what we will recognize in the year. Some of that relates to projects, productions that spans the year-end. And so we've got some revenue that we've already got visibility of that is contracted and expected to be recognized next year.

So there can be some movement in terms of where that revenue actually gets recognized because, of course, productions, the activity can move slightly one side of the year-end or slightly the other side. But usually, that is relatively marginal. So we got GBP 38 million that is contracted and expected to be booked. And then we've got this additional for -- that's a highly advanced stage, which we would then expect to recognize this year as well.

[Operator]

Next question. Medium-term target is GBP 50 million revenue and GBP 5 million EBITDA. What would H2 need to deliver to stay on track?

[William Sawyer, executive]

So the forecasts that are in the market from the broker for us to do GBP 43 million revenue for this full year in 2025 and GBP 2.1 million of EBITDA, that would set us up well going into next year, the year after and to build towards this GBP 50 million and GBP 5 million, as Mark showed on the chart. So that would mean in the second half of the year, we need about GBP 20 million revenue and GBP 1.2 million of EBITDA. And given where that pipeline is at, as we've just said, we believe that we're on track to do that. But also in terms of what needs to happen to get us to that GBP 50 million and GBP 5 million over the coming years, it's about these investments in these growth pillars, which, again, we believe we're well on track with. We've made massive progress on those this year, and we'll start to then see the fruits of that come through next year.

[Operator]

Next question. What is the status of Electric Violet and what revenue impact is expected in FY '25, '26?

[Mark Browning, executive]

Well, Electric Violet is in investment phase. It hasn't won business yet. We only launched it at the back end of last year and really only got going with it in January and full time, the individual running it was part time last year. So it's had 6 months to get going. And in that space in our TV market, it takes a number of years to build a business in the entertainment world because when you win these programs, there are a few and far between, but when you win them, they are big returners. They can be multimillion pound commissions, and they can run for 10 years, 20 years in some cases.

So it's a long game. It's a long-term play here. So we're investing, as Will showed, a few hundred thousand pounds in these initiatives. We're not expecting short-term payback from Electric Violet. We don't want short-term payback. We've got other businesses that are giving us that payback that we launched 3 years ago. This is all about getting to that 2028, 2029 range through Electric Violet. But the pipeline supports the fact that in 6 months, it's gone from not existing to having ideas in the market to having conversations of a pipeline of around GBP 11 million and having been paid by channels right now to develop some of the ideas. And when a client starts paying you to further develop an idea, they are interested in it, otherwise, they wouldn't do it.

[Operator]

Next question. What do you see happening in terms of market consolidation and what opportunities does that present for Zinc?

[Mark Browning, executive]

Well, our TV production market, it's a big market. Just unscripted, our space at the moment is a GBP 4 billion market for original commissioning. Factual is about GBP 1 billion of that. So it's a big market. But it's served by hundreds and hundreds of indies. And most of them are very small, most around GBP 5 million, GBP 10 million turnover. And one of the conversations we're having as a sector is that consolidation is needed to help drive investment in the sector.

So Zinc has been a consolidator. We've acquired 2 companies in the last 3.5 years. We have active conversations with people all the time about being a home for creatives who want to build creative businesses within the supportive structure of a group like ours, in a creative environment like ours. So we believe that we are at the forefront of being able to be that consolidator. And that's our ambition.

[Operator]

And what are the criteria for future acquisitions?

[Mark Browning, executive]

There are lots of criteria, really. I mean we're not -- this is about organic growth. So we're not about just doing acquisition. If the right acquisition is there, as it was with Raw Cut last year, this time last year, as it was with the Edge, as it was with Tern, we look at it, and the criteria needs to be accretive for our investors, which means we need to be able to acquire it at a lower [ bulk ] to pull than we are currently priced. We also need to make sure it's cash generative.

We're already making our own cash investments that we might find something that we thought is further down the line, and therefore, we could flip our cash investments into that vehicle. But we tend to look for businesses that are accretive, that are -- that allow us to scale internally within the group where we've got existing overhead and resource that could be beneficial to that company, i.e., when that company joins our group, that resource is already in the group, so we can make their margins better from day 1. We want it to be accretive in terms of valuation for shareholders, and we like them to be cash generative. We're looking at businesses that are in our core area that can accelerate our 3 pillars, but also potentially companies that can sit adjacent to us that can broaden and diversify our output.

[Operator]

Gross margin dropped this period. What margin range is expected from the new genres and territories?

[William Sawyer, executive]

I mean hopefully, we covered that on the gross margin slide. The margins are expected to increase next year, mainly from high-margin IP, so where we've got The Inner Circle quiz, and we are hoping to be able to sell that around the world. That sells at very high margin. We pay a percentage to the to BBC Studios in effect as a distributor, as the agent, but it's very high-margin revenue.

And we also expect to be able to increase the margins on the primary commissions of things like the quizzes or event production where we have taken those things on to enter new markets and we take them on at a lower margin. And overall, we think that we will do more than 40% in gross margins next year. So it will go from 30%, 37% in the first half this year, that will be slightly higher across the full year for this year and then we'll be north of 40% next year.

[Operator]

The move into reality and entertainment formats, for example, Race Against The Tide, is newer territory. How do you evaluate the risk and return of these commissions compared to your core factual documentary businesses?

[Mark Browning, executive]

So there's a lot we could go into here. The TV market is changing rapidly. There is this mantra in the broadcasters and the streamers for fewer, bigger, better commissions. And that is because audiences now are subscribing to so many services. The challenge for those broadcasters and those streamers is to stand out. And you need big glossy, powerful, noisy, [ masthead ] shows to stand out. That is the fewer, bigger, better reason. That's what they're trying to capture.

Now our business model in some of our businesses was actually for regular shoulder peak traditional linear TV programs that were commissioned for a few hundred thousand pounds an episode. That market is moving. Clients either want cheaper television, and a lot of it to service their traditional linear platforms, and it's on linear television where people have to sit down at a time and a place to watch TV. That market is, as we all know, declining because none of us -- we just don't do that as often as we used to. But the channel is still there. It's still going to be on air 24 hours a day. It needs content.

So the broadcasters need volume, and they need to spend less on that type of content than they used to because the audiences there are declining. They're moving to the on-demand platforms, the streaming services, the iPlayer or the Apple TV or the Netflix. To get audiences to go to those platforms, the broadcasters need big, glossy, high-end television like our Top Guns commission for the BBC, over GBP 1 million an episode.

So we assess whether to invest in left or right or both based on what we know the market wants, what we can afford to do, what our payback period will be, and we sit there with our broadcasters and our partners and our channels, and we know what they want and how much time and effort it might take to develop it, and then we make a decision accordingly. And we track those investments through the pipeline, making sure that we can see quarter-on-quarter that where we're making investments that haven't yet delivered that they are building in the right direction.

[Operator]

How important is the corporate film and digital content side of the business to your overall strategy?

[Mark Browning, executive]

It's very important. It's about having a diversified portfolio of production. And everybody is becoming a publisher, a broadcaster, a rights owner. So brands, retailers, businesses or producing stories of their own. It's a storytelling culture. It's a screen-based culture. And our position in the market is that we tell stories about life in all its forms, and we tell them on screen. So we are agnostic in that sense as a factual entertainment producer, we can make content for brands, businesses in TV commercials, in film or in television.

The advantage of having that mixed ecology, and we do all of our brand and business films through our Edge business. is it tends to be higher-margin business because the way budgets are constructed. It's a higher volume business than TV. It's a quicker turnaround than TV. So it really complements our TV business very well. And of course, it's allowed us to diversify into the Middle East territory. So it's a really critical pillar, high margin, high volume, faster decision-making but very complementary to the big masthead television businesses that is our core.

[Operator]

Middle East revenue was GBP 4.4 million in H1, with GBP 8 million expected FY '25. Can you give us an update on your expansion and the strategic partnerships in the Middle East?

[Mark Browning, executive]

Yes. There's a lot of them. Let me try and run them all through my head. So in Qatar, we have a business through the Edge. It's been there for 20-odd years. It's had an office there for 10. And we have expanded that footprint. We have hired new people. And then there is this Media City partnership. Now Media City is this government body that is designed to encourage investment in media and content and film and television production in country. And it has money, it has funding for that.

Much like in the U.K., if you're following TV, you have funds available from the nations and the regions, for example, to encourage the creative industries in Scotland and in Northern Ireland, which is why we have bases in those 2 nations. So it follows a similar footprint. And we are -- we've just agreed a deal to be a partner with Media City, which means we can take them ideas that they can then fund. So it's opened up a new revenue stream inside the Middle East for our core TV businesses, our long-form businesses, complementary to our existing short-form corporate business in that country.

In addition to that, in Saudi, the Edge has been working there again for many, many years and has a healthy business there. And we are moving to a permanent presence. We've typically business developed that from the U.K. with visits every month or every few weeks out to Saudi. From the end of this month, we have a permanent presence in country and an office through the partnership with an agent out there.

In addition to that, we are a business developing event production in the whole of the Middle East area, including the UAE ,and our big win in the first half of this year was in Abu Dhabi for this Supercharged event. That was through our television side in a company called Supercolider, and hopefully, almost the same name as the client. But that business is designed to put on big events and to bring the power of television to brands and to businesses.

So we've got lots of initiatives going on in the Middle East. They are in play. This will be a good year of growth for it. And I -- as I said on that slide, we need an extra GBP 2 million or GBP 3 million from that region over the next 3 years, 3.5 years, and it has potential to do considerably more if we get a following win, which we haven't got yet as you can see by this week.

[Operator]

Building on that, in the Middle East, what risks exist around political, regulatory or FX exposure?

[Mark Browning, executive]

Well, some. How is the best way to frame it? Look, we can all -- I'm not a fortune teller. We can all see the challenges that have happened this week in Qatar, particularly. But all of the evidence and all of the intelligence that the market has, that the government gives us is that is a growth market. Most multinational businesses are investing in that region and in those countries. They are growing economies much, much faster than the U.K. and the rest of Europe, a 3% or 4% growth, not 0.3% growth. And they need content, and they need producers of global standing to come and produce it for them.

So the evidence suggests that we're doing well. We've got great relationships. We're opening up new partnerships. Of course, it would be helpful if the geopolitical world we operate in stabilizes and calms down and we get some piece in the Middle East can only help. But we've targeted a very modest growth trajectory. And I'm very confident over 3.5 years that we can pull that off even in the current climate.

[Operator]

We are now moving on to our final question. [Operator Instructions]

So final question, what steps is Zinc taking to future-proof the business and ensure long-term investor returns?

[Mark Browning, executive]

Well, we are -- our revenue concentration, our client concentration now is really, really low. So that is a big part of future-proofing the business, to make sure that we're not dependent on one show or one recommission or one client or one decision maker, we have hundreds of clients. We're very diversified across both price points, product, geographical locations, client decision-making. So that is future-proofing the business. We are investing in these new markets, while at the same time, growing profitability. That is future-proofing the business.

So I feel when you're operating in a sluggish economic market that actually our performance demonstrates, and it's not just performance in half year or in a single year, over the last 4 years, through COVID and cost of living and inflation and geopolitical instability, this is a company that has consistently grown. And therefore, I stand behind the ambition and the target that we can get to GBP 50 million and GBP 5 million in the period ahead because we've derisked it and future-proofed it.

[Operator]

We have no further questions. I'll hand over to you for any closing remarks.

[Mark Browning, executive]

So I think let me address those that are current investors and those that are thinking perhaps more so of investing in the future. Hopefully, you can see the trajectory that Zinc's been on. Four years ago, when I sat in front of you, I had to sell a vision. It was always selling a vision. But 4 years ago, it was just a vision based on previous experience elsewhere in other companies. I'm now selling the vision for the next few years, 3 or 4 years based on delivery of the last 4, taking a company from GBP 20 million and losses consistently in the millions to GBP 40 million and profits in the millions and cash generation with a vision to get to a bigger scale. The cost base is set. We can get from GBP 40 million to GBP 50 million on the existing overhead.

So all of that additional revenue and the profit that flows from it will drive that EBITDA, the cash generation and the operating profit because the overhead can support a business of GBP 50 million to GBP 55 million. There'll still be the cost of sale, but on gross margins of around 40%, it is reasonable to expect that, that additional GBP 10 million can generate around GBP 4 million of additional EBITDA, which is what's in the marketplace from our brokers.

So if you're thinking of investing, I would suggest that -- and you've been thinking about when is the right time, hopefully, the evidence of the last 4 years and the vision for the next 4 years gives you the confidence to join our story. Thank you.

[Operator]

Thank you to Mark and Will for joining us today. That concludes the Zinc Media Group investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.