Zonal checks in with profit increase and contract wins

Till and point-of-sale specialist Zonal Retail Data Systems is on track for another year of profitable growth after securing accounts with big names including Pizza Express.

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

The Edinburgh-based company, founded in the late 1970s and now employing nearly 500 people, gave the upbeat outlook as it unveiled a 52.2 per cent increase in trading profit to £3.5 million.

However, its results for the year to the end of June 2016 also revealed a sharp fall in turnover to £45m from £59.6m the year before.

Zonal said this was largely due to taking the “strategic” decision to no longer recognise some of its revenues through its food purchasing portal. The firm has opted to focus on the rapid growth of its software-as-a-service business model, generating long-term recurring revenue rather than bigger upfront sales.

The group said it had made a positive start to its current financial year with a strong order book in place. A rapid expansion of its customer base has seen installations take place at more than 1,400 additional locations, along with “significant” existing customer upgrades and new product sales.

The company has also continued to expand with “carefully selected” acquisitions including a majority shareholding in Cardiff-based High Level Software, a property management systems provider to the hotel sector.

Chief executive Stuart McLean said Zonal was “unrecognisable” from the business that was launched almost 40 years ago.

He said: “We have evolved from a Scottish start-up business to the market leader in the UK hospitality technology market.

“We are proud of our Scottish heritage and believe that by employing strong local talent, which is nearing 500 employees, we will continue to provide a unique offering that makes us stand out from our competitors.

“We remain focused on improving our business and have taken key strategic decisions that have been instrumental in driving our long-term vision and these have driven the improvements in cash and margins.

“We have a very strong new business pipeline in place and are really excited about future developments.”

The firm said it continued to invest heavily in research and development with £4m pumped in to the business during the 12 months to June and this is forecast to grow “significantly” in the next financial year.

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