Capital-based Zonal rings up surge in R&D and turnover

Zonal, the Edinburgh-based hospitality payments and technology specialist, has seen its annual sales grow by a fifth as its investment in research and development pays off.

Chief executive Stuart McLean said Zonal is unrecognisable from the business that was launched almost 40 years ago. Picture: Contributed

During the 12 months to the end of June 2017, the firm saw a “rapid” expansion of its customer base, with installations at more than 1,800 additional locations, along with “significant” existing customer upgrades and new product sales.

Zonal, which has more than 15,000 UK leisure and hospitality businesses on its books, added that the strong growth had continued into the new financial year, with the company recently securing several new contracts within the wider hospitality environment and a significant future sales pipeline.

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Turnover grew by 20.5 per cent year-on-year to £54.3 million during the 12-month period. Operating profit before tax came in at £4m, up from £3.5m a year earlier.

The firm said that profits and both gross and operating margins had risen despite a sharp increase in investment in new product development. R&D investment totalled some £4.9m, up from £3.8m previously.

Zonal’s long-term investment rationale including a focus on its software-as-a-service (SaaS) business, with its recurring revenue model, is said to be “paying dividends” with 62 per cent year-on-year sales growth.

The firm, whose clients include major chains such as JD Wetherspoon, Pizza Express and Mitchells & Butlers, said that its investment in Cardiff-based High Level Software was also “reaping benefits” as it continues to deploy its technology in hotels and sectors of hospitality beyond pubs, bars and restaurants.

Chief executive Stuart McLean said: “Zonal has come on a long journey since it was founded by my father almost 40 years ago and he would be very proud of our achievements. Zonal remains fiercely independent, which enables us to be nimble and quick to respond to the ever-changing world of technology.

“We remain focused on R&D with plans to launch new innovative products during 2018.

He added: “It’s an exciting time for the industry as technology becomes a key part of the consumer out-of-home experience, with the growth in pre-order, mobile ordering and food delivery.

“We will continue to extend our integrated product offer to meet these trends and broaden our customer reach through further strategic acquisitions.”