27 June 2023
Infrastructure and financial resources in place to support rapid organic and acquisitive growth
Zzoomm, an established and rapidly growing Full Fibre operator, has published its results for the year to 31 December 2022.
Highlights
- Operating across 21 market towns and small urban communities
- During 2022 commenced network construction in: Great Ayton, Northwich, South Elmsall, Stokesley, Winsford, Congleton and Wombourne plus settlements surrounding on-going builds at Cannock, Crewe, Hereford and Northallerton
- Now completed build of networks in Crowthorne, Henley-on-Thames, Sandhurst, Thirsk & Easingwold
- Properties ready for service rapidly growing
- End of December 2022, circa 94,000 properties (2021: 10,000) ready for service with circa 6,300 (2022: 1,400 customers) contracted
- End May 2023, over 140,000 properties (2022: 38,000) ready for service and over 12,000 (2022 3,700) customers contracted
- Standout challenger brand, achieving a Trustpilot rating of “Excellent”, continues to be synonymous with excellent customer focus, transparency, quality of service and product reliability as well as connection speeds innovation
- Revenue jumped £1.2m (2020: £0.4m) as recurring subscription revenue began to pick up from customers across the country
- Operating loss £12.3m (2020: loss £8.15m) reflecting continued investment in accelerating the growth of the business
- Customer penetration rates growing – established networks now circa 30%
- Continued to draw funding from Oaktree Capital Management and debt facility from ING, Hamburg Commercial Bank and Kommunalkredit secured in 2022
- May 2023 – roll out to three new market towns announced, construction already underway. Now building in 12 market towns
Matthew Hare, CEO Zzoomm commented:
“Now in our fourth year, demand for our Full Fibre across the market towns we serve remains strong. Our rate of development is accelerating with our subscription revenue stream rapidly growing. One of our latest builds completed in early 2023 is already seeing our greatest customer demand and rapidly outperforming the business’ normal customer take up rates.
“We are ramping up our roll out programme and will commence building in more market towns and other urban communities. We expect to release more properties ‘ready for service’ in 2023 than all the prior three years combined. Our focus will be to leverage the opportunity to target smaller but higher potential locations where we can build and drive higher rates of customer penetration.
“We have extensively invested in our infrastructure and have the financial resources to support our rapid build programme. We are pursuing our plans to acquire other Full Fibre network operators and reach our objective to provide Full Fibre services to 1 million properties .”
For more information contact
Zzoomm
Chris Collinson, Chief Commercial Officer 07977 246661
Meare Consulting 07990 858548
Adrian Duffield
Note to editors
Zzoomm (www.zzoommgroup.com) is an established and rapidly growing full fibre network operator, providing FTTP (Fibre to the Premises) to underserved market towns where there is minimal or no existing access to a Full Fibre network.
Zoomm is now operating across 21 market towns and small urban communities in England and as a standout challenger brand is synonymous with excellent customer service, quality of service and product reliability. An inherent innovator, Zzoomm was the first ISP to deliver a residential 10Gbps (10,000 Mbps) product.
Zzoomm, which is backed by Oaktree Capital Management, is headquartered in Oxford and has seven regional offices.
Strategic overview
Zzoomm is an established and rapidly growing Full Fibre network operator, building and providing FTTP (fibre to the premises) in market towns and other small urban communities where there is no widespread or minimal access to a Full Fibre network.
Zzoomm is building communications infrastructure for consumers and businesses which will generate long term returns. In addition to its rapid organic roll out programme, Zzoomm is actively looking to acquire other Full Fibre network operators.
The Group’s focus is on serving the needs of customers directly through a great value and high-quality broadband service. Zzoomm’s standout challenger brand continues to be synonymous with excellent customer focus, transparency, quality of service and product reliability as well as connection speeds innovation.
As at March 2023, Zzoomm was operating in 14 towns and has over 110,000 homes and businesses Ready for Service and over 10,000 customers under contract. Customer take-up continues at a steady pace, and the first network to be completed in November 2020 in Henley-on-Thames has better than 27% penetration.
Zzoomm, which is backed by Oaktree Fibre Holdings S.à r.l. (“Oaktree”), is headquartered in Oxford and has seven regional offices to drive infrastructure planning and build at a local level in its target market towns.
During 2022, the Group received further funding from Oaktree and drew down from the £100m secured Bank financing facility from ING, Hamburg Commercial Bank and Kommunalkredit. As at 31 December 2022, £75m of the facility had been utilised.
Outlook
Now in its fourth year of operating, the business’ rate of development is accelerating with the subscription revenue stream rapidly growing. The demand for Full Fibre across the market towns served by Zzoomm remains strong and revenues will continue to grow rapidly.
Zzoomm is ramping up its roll out programme and plans to provide service to up to 1 million properties over the next five years. The Group plans to commence build in more market towns and other urban communities in 2023.
Markets
There are approximately 31 million properties in the UK, of which approximately fourteen million have access to Full Fibre broadband connectivity. The demand for Full Fibre and gigabit-capable networks which provide fast, reliable and future-proofed connections with excellent service, both for homes and businesses, has increased rapidly over the last few years. This has been driven by the migration of entertainment and communication to the internet and the requirement that the myriad of devices used are all connected all the time to the internet.
Although many homes and businesses benefit from a choice of broadband connections, which deliver superfast or higher speeds, there are large areas of England where faster services are not available yet.
As at March 2023, Zzoomm has over 110,000 homes and businesses Ready for Service and over 10,000 customers under contract.
Network and infrastructure
Zzoomm owns and operates its asset and is building its own full fibre network. A Zzoomm connection allows each customer to connect up to 150 devices, with symmetrical upload and download services at speeds typically from 150Mbps to 2000Mbps.
All residential services and the majority of business services use XGS-PON technology to deliver the Zzoomm broadband service. Zzoomm also delivers very high capacity dedicated communications services over 10Gbps or 100Gbps bearers for enterprises using point-to-point fibre across the same network routes.
The Zzoomm Full Fibre network is built using a combination of new build and wholly owned underground ducts, Zzoomm utility poles with overhead fibre and also sub-ducts within the BT Openreach network and overhead fibre on BT Openreach poles.
Zzoomm has regional offices covering for the management of the network roll-out. These local offices drive infrastructure planning and deployment to meet the requirements of local residents and the local authority and to minimise resident disruption.
Construction
Over the last three years, Zzoomm has employed its own construction teams alongside third-party contractors, to build the infrastructure needed in the larger towns – such as Hereford, Crewe and Cannock. Most other alt net operators use third party contractors alone.
During 2023, Zzoomm is shifting to a principally contractor-based construction business model as the numerous new towns, where there is the opportunity to build the first full fibre network, are smaller and more spread out. This will enable the roll out programme to continue to accelerate whilst being more flexible.
This is resulting in a reduction in the number of direct employees in its own build teams during the year to date in 2023.
Towns, customers and service
In 2022, the Group commenced network construction in Wombourne, Winsford, Stokesley, Great Ayton, Northwich and South Elmsall as well as settlements surrounding the on-going builds of Hereford, Northallerton, Cannock, Crewe.
Zzoomm has completed the core build of networks in Crowthorne, Sandhurst, Thirsk & Easingwold in 2021 and Henley-on-Thames in 2020. In 2023, the company has commenced construction in the surrounding towns and settlements of the existing core building areas.
As at the end of 2022, there were circa 94,000 properties ready for service (2021: 10,000) with circa 6,300 customers connected to the Zzoomm network (2021: 1,400) with planning well underway for a number of new towns where construction will commence in 2023.
At the end of April 2023, these numbers had increased to circa 135,000 properties ready for service (March 2022: 28,500) and circa 11,000 customers (March 2022: 1,900).
Zzoomm is actively recruiting new people in the customer and field service functions, sales and marketing.
Financial Results
In the 12 months to 31 December 2022, Group revenue increased to £1.2m (2021: £0.4m) as the recurring subscription revenue began to accelerate in all regions.
The Group made an operating loss of £12.3m (2021: operating loss of £8.1m) in the period, driven by the continued overhead investment required to expand the building progress.
Building continued and increased to the end of 2022; £90.2m had been spent on network build as at 31 December 2022 (2021: £25.5m as at 31 December 2021). This is in line with the Board’s roll out plans.
At the end of the year, the Group cash balance was £18.3m (31 Dec 21: £6.5m).
The Group’s full consolidated accounts have been filed at Companies House.