Zen Internet’s earnings tumble by 70%

INTERNET service provider Zen has seen its profits plummet by around 70% to £589,000 despite an increase in sales over the past financial year.

The Rochdale-based company said that it had increased its turnover to £38m from £35.1m last time through expanding its product offering and increasing its customer base.

Its latest filed accounts also show that its operating profit has decreased as a result of the company ‘expanding  its core network’, enhancing its internet products and ‘internal systems’.

The company’s move to a new HQ in 2008 lumbered it with a £14m bank loan, secured against the company, and the report also shows that the first full year of paying costs linked to these premises also impacted on its results.

The Directors’ report for the year ended September 30, 2009, states: “During the year, the company has generated growth in newer and enhanced products which generated increased turnover of £1.9m.

“The directors believe that this growth will continue and combined with additional new products, will provide further increased turnover and profitability.

“The directors have assessed the main risk facing the company as being on-going competition from other commercial operators.

“However, the directors believe that the higher quality of Zen Internet’s products, core network, customer service and competitive pricing will help mitigate these risks and hope to see continued growth and satisfactory trading results in the coming year.”

At the year end, the company had stakeholder funds of £6.5m including its post tax profits of £589,000.

The company had profits of £1.95m in 2008.

Zen specialises in providing internet access, web hosing, website design and e-commerce solutions.