Zen Internet Touts UK Growth and Explains Accounts Blip

UK ISP Zen Internet, which is now home to 430 staff, has revealed that their operating profits surged 34% from £760,000 to £1.02m in the year to the end of September 2014 and revenues rose 6.8% from £47.36m (2013) to £50.62m. But there were also a few blips for the accounts department to tackle.

Apparently much of the growth is being attributed to Zen’s investment in its underlying broadband and phone infrastructure, which among other things saw them put £3.5 million towards the construction of a new network of local telephone exchange PoPs (Points of Presence) during 2013.

Matt Kay, Zen’s Finance Firector, said:

“The benefits of this investment account for the year-on-year growth in operating profits, but the real impact is now being realised in the 2015 performance with revenues continuing to grow.

The company is now on track to report an operating profit up almost threefold from that reported in 2014 and this year – 2015 – is expected to be the most profitable in Zen’s 20 year history.”

Mind you it wasn’t all plain sailing and Zen’s most recently filed accounts revealed a technical breach on one of the company’s banking covenants with its investment partner NatWest, which relates to a property loan that the ISP took out in 2008 to buy their head office. Thankfully the issue appears to have been cleared up and Zen’s loan will continue to be repayable over the remaining term of the agreement until 2028.

Separately HMRC are said to be challenging a historic investment that Zen made into a film business. “Zen does not expect the challenge to materialise, but to be prudent we have recognised a contingent liability [£423,000] in our financial reports. We do not consider our involvement in the scheme to be in any way questionable,” said Zen.