Zzoomm building momentum across market towns in England
Zzoomm, the rapidly growing Full Fibre market towns operator, has published its results for the year to 31 December 2021.
· Continued to add customers rapidly onto the first Zzoomm network in Henley-on-Thames (network completed 2020)
· Network construction commenced in Cannock, Crewe, Crowthorne, Easingwold, Great Ayton, Hereford, Northallerton, Sandhurst and Thirsk
· Properties ready for service rapidly growing
o End of December 2021, circa 10,000 properties ready for service with circa 1,400 customers connected
o End June 2022, over 50,000 properties ready for service and over 3,000 customers connected
· Revenue jumped £0.4m (2020: £0.1m) as recurring subscription revenue began pick up from customers in Henley-on Thames
· Operating loss £8.1m (2020: loss £5m) reflecting continued investment in new employees for regional and head offices as well as fundraising fees
· Further funding from Oaktree Capital Management and £100m facility secured from ING, Hamburg Commercial Bank and Kommunalkredit
· May 2022 – roll out to seven new market towns announced, construction already underway. Now building in sixteen market towns
o Increasing network reach in Cheshire, Yorkshire and Staffordshire.
Matthew Hare, CEO Zzoomm commented:
“In 2021 we laid the foundations for growth, and the first half of 2022 sees us realising the potential of the Zzoomm Full Fibre network.
“We are a firmly established and rapidly growing Full Fibre network operator, providing fibre to both homes and businesses in 16 market towns. In these market towns, we provide Full Fibre service with unmatched performance that is not reliant on the slow, unreliable copper used by other broadband providers.
“We are now seeing real momentum in our roll out and connection programmes across all the market towns in which we operate. Once these are completed, we will be able to provide Full Fibre broadband to over 250,000 homes and businesses.
“Our Zzoomm standout challenger brand is already synonymous with excellent customer focus, transparency, quality of service and product reliability, topped off with fabulous speeds that only Full Fibre networks can deliver.”
For more information contact
Chris Collinson, Chief Commercial Officer 07977 246661
Meare Consulting 07990 858548
Note to editors updated
About Zzoomm plc (www.zzoommgroup.com)
Zzoomm is a rapidly growing Full Fibre network operator, connecting market town communities to future-ready, gigafast broadband that empowers homes and businesses.
Building a future ready Full Fibre network that connects people effortlessly with the perfect blend of innovative technology, first class customer service and unmatched speeds, it’s our mission to provide premium broadband at an accessible price.
Zzoomm’s standout challenger brand is synonymous with excellent customer focus, transparency, quality of service and product reliability as well as connection speeds innovation. It was the first UK operator to deliver a 10Gbps (10,000 Mbps) connection.
Zzoomm, which is backed by Oaktree Capital Management, is headquartered in Oxford, and has invested in five regional hubs and training centres to drive an agile approach to the rollout of Full Fibre.
Strategic overview and outlook
Zzoomm is an established and rapidly growing Full Fibre network operator, providing FTTP (fibre to the premises) in nine market towns that lacked access to a Full Fibre network. Zzoomm is building future-ready communications infrastructure for consumers and businesses for the long term across the UK.
A standout challenger brand; Zzoomm is synonymous with excellent customer focus, transparency, quality of service and product reliability. Zzoomm was the first operator to deliver 10Gbps (10,000 Mbps) connections in a move designed to showcase the experience and capabilities of the Zzoomm network.
There are approximately 31 million properties in the UK, of which approximately eight million have access to Full Fibre broadband connectivity. The demand for Full Fibre, gigabit-capable networks that provide fast, reliable and future-ready connectivity, coupled 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 surge in IoT devices requiring bandwidth.
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 gigabit services are not yet available. Zzoomm has identified an addressable market of 4.5 million homes and businesses located across the UK’s market towns, with over 180 potential areas identified to deliver our gigafast broadband.
In addition to its rapid organic roll out programme, Zzoomm is also monitoring this dynamic marketplace with a view to M&A activity of other Full Fibre network operators.
Zzoomm, which is backed by Oaktree Capital Management, is headquartered in Oxford and has invested in five regional hubs and training centres to drive an agile approach to infrastructure planning and build.
As at March 2022 Zzoomm has c.500 people, of which 359 work in construction, with plans to increase this further to support future plans.
During 2021, the Group received further funding from Oaktree Capital Management and arranged a £100m secured Bank financing facility from ING, Hamburg Commercial Bank and Kommunalkredit.
Now in its third 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. The Zzoomm board expects there to be continued disruption to the supply chain during 2022 and significant inflationary pressures on components and labour costs.
Zzoomm is further ramping up its roll out programme after recently announcing Great Ayton and Stokesley, Sandbach, Northwich, Congleton, Wombourne and Sherburn-in-Elmet as it forges ahead with its plan 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 will also continue to fundraise in 2022.
Zzoomm fully owns and operates its assets and is building its own Full Fibre network using XGS-PON technology. A Zzoomm connection allows each customer to connect up to 150 devices with symmetrical services starting from 150Mbs and ranging up to 10,000Mbps. Zzoomm delivers premium, high-capacity dedicated communications services for enterprises using point-to-point fibre across the same network routes.
Zzoomm directly employs its own construction, installation, sales and service staff, many from within the local communities it serves, in order to deliver its outstanding consumer focused service. Local offices drive infrastructure planning and deployment to meet the requirements of the local authority and to minimise resident disruption.
The immediate focus is on serving the needs of customers directly through a great value and high-quality broadband service. The Zzoomm Full Fibre network is built using a combination of new built and wholly owned underground ducts and sub-ducts within the BT Openreach network and overhead poles.
In 2021, the Group commenced network construction in Hereford, Thirsk, Easingwold, Northallerton, Cannock, Crewe, Crowthorne and Sandhurst having completed the network in Henley-on–Thames in 2020.
The Group has continued to add customers onto its first network in Henley-on-Thames. During late 2021 and early 2022 it has started to add customers across all its other networks as each phase of build has completed and the properties have become Ready For Service.
As the end of 2021, there were circa 10,000 properties ready for service with circa 1,400 customers connected to the Zzoomm network with planning well underway for several new towns where construction will commence in 2022. At the end of March 2022, these numbers had significantly increased to circa 28,500 properties ready for service and circa 1,900 customers.
In the 12 months to 31 December 2021, Group revenue jumped 300% to £0.4m (2020: £0.1m) as the recurring subscription revenue began to pick up from customers in Henley-on–Thames.
The Group made an operating loss of £8.1m (2020: operating loss of £5m) in the period, driven by the continued overhead investment required to recruit employees and create regional and head offices as well as fundraising fees for the additional investments.
Building commenced in September 2019 and continued to the end of 2021, £25.5m had been spent on network build as at 31 December 2021 (2020: £6.4m as at 31 December 2020). This is in line with expectations. At the end of the year, the Group cash balance was £6.5m (31 Dec 20: £2.0m).
Key Performance Indicators
The Group has several key performance indicators that are used to track the performance of its business and include:
· Cost Per Property Passed: This is the cost of building past each available property in the network
· Average revenue per customer (excluding VAT): The average revenue per customer per month
· Cost Per Customer Acquired
· Cost Per Property Connected: This is the cost of build and connection to a property connected to and operating on the network
· Number of customers acquired as a proportion of the properties ready for service.
· Number of properties ready for service, defined as a customer being able to be connected to our network in that property within 4 hours.
Environmental, social and governance (ESG)
The Group is governed by a Board distanced from the day to day running of the business and an experienced Senior Leadership team. We seek to reduce our impact on the environment across our businesses and support the teams and communities we serve. We do this with supporting policies, contracts, systems and processes. The Board is also extremely focused on all aspects of the Health and Safety of our staff.
Zzoomm is committed to challenging the large ISP’s operating in its locality by offering superb customer service and product reliability, in an industry where customer fairness and transparency is not the norm. It is also committed to ensuring that both new prospects and existing customers have access to the best offers and propositions in the market and to investing in areas without Full Fibre given the importance of connectivity so everyone can participate in an increasingly digital society.
Zzoomm’s ESG activities are summarised below:
· Minimise waste internally through recycling, reusing and reducing our overall consumption in our offices as well as in the field.
· Minimise waste with our supply chain by asking for recyclable materials, less packaging and encouraging re-use of materials where possible.
· Minimise energy usage through low energy office lighting and technology and throughout our network we use low power with a passive network.
· Using recycled aggregate and materials and recycling our spoil where practical.
· Seek to use energy suppliers who are taking steps to become zero carbon organisations by 2025.
· We transform the opportunity for the community by deploying a future proof Full Fibre network to every property in the community covering all aspects of society and businesses.
· Our network is agile, it can scale and expand as the community grows and population changes, ensuring everyone has a reliable, gigafast broadband connection.
· We engage frequently and openly with the local stakeholders to ensure we are working to benefit the community as well as minimalizing the disruption during the build process.
· We educate the community on the benefits of fibre and internet connectivity.
· We work with local colleges and schools to educate and build digital skills through lectures and workshops with students
· We ensure our money and effort is put behind local initiatives of value to the community.
· We recruit locally.
· We source locally, everything from printing to catering to building supplies and local services.
· Our operationally separated board leads the business.
· We have an experienced Senior Leadership team providing operational governance and oversight.
· We report our key measures openly and continuously across the business.
· We have clear division of responsibilities internally that increase control in the business and mitigate risk.
· We’re externally audited with board level oversight and reporting on behalf of the shareholders.
· We comply with CDM 2015 and comply with Principal Designer and Principal Contractor obligations.
· Personal data is handled in line with ICO guidelines.
· Our systems ensure we take steps to protect data by limiting user access and data encryption.
· Health and Safety is an important consideration and is always top of the agenda to ensure we build a network that is in an environment that is safe for our employees, our customers and the general public.
The Full Fibre to the Premises Market
During 2021 the rate of new Full Fibre build in the UK has accelerated significantly. The market has seen a significant number of new entrants, some of whom have a similar business strategy to The Group.
The result of the ongoing investment into Full Fibre has meant that the UK has moved from 10% to 30%* Full Fibre availability during the year. Despite this activity, there remains significant opportunity for development and success for Full Fibre operators with well-focused business strategies.
The Group’s full consolidated accounts have been filed at Companies House.