REG - Vianet Group PLC - Half-year Report
12/12/2023 07:00
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RNS Number : 4002W Vianet Group PLC 12 December 2023
Vianet Group plc
("Vianet", "the Company" or "the Group")
Interim Results for half year ended 30 September 2023
Momentum building and on track to deliver sustained growth.
Vianet Group plc (AIM: VNET), is the international provider of actionable data
and business insight to the hospitality, unattended retail vending and remote
asset management sectors through its ecosystem of connected hardware devices,
management software platforms and smart insights portal, presents its
unaudited results for the six months ended 30 September 2023.
Financial highlights
● H1 2024 revenue increased to £7.19m (H1 2023: £7.18m).
● Recurring revenues remained strong at 87% (H1 2023: 86%).
● Gross margin was very healthy and increased by 7.8% to 69% (H1 2023: 64%),
driven by recurring revenue growth and operational cost management.
● Adjusted operating profit((a)) up 7.4% to £1.30m (H1 2023: £1.21m).
● Like-for-like adjusted operating profit((a)) up c 24% at £1.5m pre recently
acquired BMI operating loss of £200k.
● PBT on a like-for-like basis was £29k (H1 2023: loss £107k) pre-BMI.
● Operational cash generation, post working capital was £1.29m (H1 2023:
£0.71m), with strong cash conversion at over 105% of EBITDA.
● Net debt reduced to £2.09m (H1 2023: £3.56m).
((a)) Adjusted operating profit is profit before exceptional costs,
amortisation, interest, and share-based payments
((b)EBITDA) is earnings before interest, tax, depreciation, and amortisation
We are pleased to report that despite a challenging economic environment, the
Group has performed in line with management's expectations, achieving
year-on-year growth in key performance indicators and that the Group is very
much on track to meet management's profit expectations for the full year.
In the hospitality division, we maintained a strong performance in the UK's
leased and tenanted sector and made inroads into the UK-managed sector. This
was bolstered by introducing a new insights portal and the strategic
acquisition of Beverage Metrics Inc ("BMI"), enhancing our ability to offer a
comprehensive beverage management solution.
The Smart Machines division has also seen notable year-on-year growth,
overcoming the initial delays in H1 orders due to customers' planning for the
mobile network operators' ("MNO") 3G switch-off. Vianet's proactive support in
transitioning customers from 3G to 4G has transformed this initial challenge
into a sales catalyst in H2. The Company is not only upgrading its existing
customer base but also capturing new business by replacing competitors' 3G
units with our advanced 4G LTE products.
Overall, Vianet Group plc continues to demonstrate its industry leadership and
commitment to helping businesses optimise their operations, increase
profitability, and reduce their environmental impact.
Divisional highlights
1) Smart Machines
· In H1 2024, Smart Machines achieved sales of 5,264 units, a decrease
from the previous year (6,306 units) primarily due to transitional delays in
the 3G to 4G network upgrade, which we anticipate unwinding in H2 2024.
· The division saw a 5.9% annual growth in its operational estate,
which now totals 55,575 devices.
· We also successfully established 4,246 new contactless payment
connections, further consolidating our strong market position.
· The division's adjusted operating profit grew 29.6% to £1.05
million, reflecting our continued commitment to innovation and customer
satisfaction.
· We secured 37 new contracts, spanning 3-5 years, demonstrating the
success of our market engagement strategy whilst also achieving our strategic
objective of expanding into the forecourt sector. This marks a significant
diversification milestone.
2) Smart Zones
· Smart Zones UK reported a solid adjusted operating profit of £1.96
million, a modest increase from £1.89 million last year.
· Integrating BMI into our US operations and acquisition-related
expenses impacted overall divisional profitability by £0.25m, resulting in an
overall profit of £1.71 million.
· We secured two new long-term contracts and renewed three existing
ones, reinforcing our strong market presence and the strength of our long-term
client relationships.
Operational highlights
Integration of BMI
· We have integrated the newly acquired BMI with our draught monitoring
platform, creating an advanced beverage management solution.
· This integration significantly enhances our market position in both
the USA and UK hospitality sectors.
Unattended Retail divisions' proactive approach
· Our Unattended Retail division implemented the "Retain & Gain"
strategy in response to the MNO 3G switch-off.
· This strategy led new and existing customers to commit to long-term
contracts to upgrade to our 4G LTE solutions, expanding connectivity within
their vending networks.
Expansion into the Forecourt sector
· In a significant strategic move, our Unattended Retail division has
established a presence in the Forecourt sector, securing an initial order for
approximately 800 units from a key industry player.
Carbon reduction
· Aligned with our ESG commitments, in H12024, we achieved a 63%
reduction in energy consumption year-over-year, essentially achieving our goal
to reduce our annual energy consumption at our headquarters by over two-thirds
by 2025, reinforcing our dedication to environmental sustainability.
Commenting, James Dickson, Chairman and CEO of Vianet Group plc, said:
"Overall, we have had a notable improvement in the Group's performance with a
good first half of the year despite challenging market conditions and the
sales drag resulting from unattended retail customers taking time to
understand the UK's 3G switch-off and develop their upgrade programmes.
Although gradual at first, this transition is now providing a catalyst for
continued sales growth in the second half of the year, underpinned by an
increase in urgency in our customers' transition from 3G to 4G networks.
The efforts and strategies implemented in the first half are now bearing
fruit, leading to robust sales growth across our hospitality, unattended
retail, and forecourt sectors. This progress reinforces our confidence in
meeting management's profit expectations for the full year.
Our strategic acquisition of BMI in the US for £577,500 marked a significant
step in our international expansion, particularly in the US hospitality
market. The acquisition has significantly bolstered our presence and growth
potential in the region, accelerated our hospitality product roadmap by 12-18
months, and enabled integration with a leading pay-to-procure provider for
alcohol supply in the USA. Alongside our existing strategic relationships,
this acquisition positions us well to establish a profitable and expanding
footprint in a very large addressable market.
The receipt of a £924,774 HMRC refund and interest, coupled with our new
banking agreement with HSBC, strengthens our financial foundation, enhances
our liquidity position, and supports our ongoing growth strategy.
Our collaborations with Vendekin Technologies and Suresite have opened
exciting new avenues in the unattended retail and fuel forecourt sectors,
presenting us with opportunities to expand our market reach and enhance our
revenue streams. Although still in its early stages, we are very excited about
the potential of the mobile checkout market for unattended retail in the UK
and the solutions we can now offer are being warmly received by our customers.
We have established a solid foundation for future growth, underpinned by a
dynamic team, an innovative product range, robust recurring income streams and
a strong sales pipeline in our key markets. Looking ahead, we are excited
about the potential of our data capture technology in new, complementary
verticals. Over the last four years, our unwavering commitment to becoming the
trusted advisor in our chosen sectors has yielded significant results, with
more operators seeking our expertise.
During this period, the Group has successfully navigated the post-pandemic
landscape, making calculated strategic investments in sales, technology, new
market sectors, product expansion, and strategic partnerships. These
investments demonstrate their value, placing the Company in a strong position
for sustained growth in recurring revenues and earnings, robust cash flow
generation and dividend distribution.
As we continue implementing our long-term strategic vision and exploring new
opportunities for Vianet, my optimism and confidence in our prospects have
never been stronger."
- Ends -
James Dickson, Chairman & CEO, and Mark Foster CFO, will provide a live
presentation relating to results for the six months ending 30 September
2023 via the Investor Meet Company platform today at 10:30 am GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard until 9 am
the day before or during the live presentation.
Investors can sign up to Investor Meet Company for free and add to
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Enquiries:
Vianet Group plc
James Dickson, Chairman & CEO Tel: +44 (0) 1642 358 800
Mark Foster, CFO www.vianetplc.com (http://www.vianetplc.com)
Cavendish Capital Markets Limited
Stephen Keys / Camilla Hume Tel: +44 (0) 20 7397 8900
www.cenkos.com (http://www.cenkos.com)
About Vianet
Vianet has established itself as an industry leader with its award-winning,
proprietary suite of solutions. Our offerings encompass telemetry,
connectivity, payment solutions, inventory management, ERP software platforms,
energy-saving solutions, and a comprehensive business insights and market data
portal. These innovative solutions empower businesses in hospitality,
unattended retail, and the fuel forecourt sectors to optimise costs, boost
sales, and enhance profitability and cash flow while significantly reducing
their carbon footprint.
Vianet clients, typically engaged in 3-5-year contracts, benefit from our
services by receiving operational alerts, performance dashboards and critical
business insights. These tools are instrumental in transforming their
operational efficiency and become even more vital during periods of economic
downturns and uncertainty.
Chairman and Chief Executive Officer's Statement
The Group has achieved year-on-year growth in its core divisions, resulting in
a 7.4% increase in adjusted operating profit to £1.30m, after accounting for
approximately £200k in costs related to the BMI acquisition. Despite economic
headwinds and the necessity for a 3G to 4G network upgrade, our strong H1 2024
performance and promising H2 2024 outlook affirm the Board's expectations of
meeting management's profit expectations for the full year.
Performance
Group turnover stood at £7.19m (H1 2023: £7.18m). Our dependable recurring
revenue, from 3-5 year contracts, rose to £6.28m, representing 87% of our H1
2024 turnover (H1 2023: £6.18m, 86%).
The Group's adjusted operating profit increased by 7.4% to £1.30m (H1 2023:
£1.21m), including BMI's acquisition-related operational costs of about
£200k. Without these additional one-off expenses, the growth would have been
24%, or £1.50m.
Our pre-tax loss was £0.17m (H1 2023: £0.11m loss), after considering
£0.33m in exceptional costs primarily from acquisition activities.
Without the BMI-related operational costs of £200k, the pre-tax figure would
have been a profit of approximately
£0.03m.
The Group's loss per share was 0.58 pence (H1 2023: loss 0.27 pence), with
earnings per share at 0.02p before accounting for BMI costs.
Smart Machines
Sales of new telemetry and contactless payment devices have driven a notable
29% increase in the adjusted operating profit of our Smart Machines division,
reaching £1.05m from £0.81m in H1 2023. Year-on-year, our installed base
expanded by approximately 5.9%, growing from around 52,500 to just under
55,600 connected units. The first half of the year saw a slower pace due to
customers adapting to the 3G network phase-out and transitioning to 4G
technology. This initial slowdown, combined with accumulated demand, is
expected to boost sales in the second half of the year.
Our sales team in the Smart Machines division successfully secured 37 new
contracts and renewed 8 existing ones, mainly on five-year agreements. The
second half of 2024 is already showing promising signs, with more contracts
being secured as operators increasingly choose our comprehensive offerings.
Furthermore, we have made inroads into the petrol forecourt sector, attracting
orders from key industry players.
The division is well-positioned, benefiting from our comprehensive end-to-end
solution, industry-leading Suresite transaction rates, supportive commercial
strategies for operators, a reputation for exceptional customer experience and
growing status as a trusted advisor in the market. We are confident that the
combination of these strengths and our strategic commercial initiatives will
enable us to attract new customers and continue to propel our growth.
Smart Zones
Our core UK hospitality business in the UK delivered a 4% rise in adjusted
operating profit to £1.97m (H1 2023: £1.89m). After deducting approximately
£200k associated with Vianet Americas and the post-acquisition phase of BMI,
the overall return for the Smart Zone division stood at £1.71m (H1 2023:
£1.81m).
During this period, we saw a deceleration in the closure rate of pubs within
our core UK installation base. The net decrease was limited to 150 contracted
sites, bringing the total number of our UK sites to 9,720. The acquisition of
BMI has significantly bolstered our operations in the US, adding around 120
revenue-generating sites to our portfolio. Whilst headlines on closures and
the health of the pub industry may cause understandable concern, I am very
confident that the Group's hospitality division is positioned to deliver
growth for the following reasons:
· The leased and tenanted sector has a high degree of resilience, which
underpins existing recurring revenues. Having undergone decades of
rationalisation, the remaining UK leased and tenanted estate is of decent
quality. Leased and tenanted licensees are personally invested in the success
of their business, both financially and in sweat equity. For the majority, the
pub is also their home.
· Following the successful integration of BMI, the Group now has
comprehensive beverage management and energy-saving solutions that enable UK
and USA hospitality operators to significantly improve performance with 4 -7
months payback periods.
The BMI acquisition has opened significant new avenues in the American market
and accelerated our hospitality product roadmap by an estimated 12 to 18
months. This acquisition has also facilitated a partnership with a prominent
alcohol procurement provider in the US. These developments and our strategic
alliances have laid the groundwork for fruitful engagements with major US
chains, setting the stage for a profitable expansion in a substantially larger
addressable market by FY2025.
Dividend
We continue proactively managing our cash reserves, focusing on funding
operations and growth initiatives. Our newly arranged banking facilities with
HSBC enhance our financial flexibility and reduce loan repayments. In October
2023, the Board declared a final dividend of 0.5p for FY2023 but continues to
adopt a cautious approach as we navigate the second half of the year.
Consequently, we have not declared an interim dividend for H1 2024. However,
subject to stable market conditions and sustained financial improvement, we
anticipate the potential for a final dividend in October 2024 for FY2024,
backed by our H2 2024 cash flow.
Outlook
Our strategic investments in technology and customer solutions, alongside our
strategic launch into the forecourt sector and the acquisition of BMI, have
laid a solid foundation for sustained momentum into H2 2024. These factors
instil confidence in our ability to meet management's full-year profit
expectations.
Our team's collaborative efforts with customers and suppliers in intelligent
cash management solutions are generating good prospects in remote asset
management, contactless payments, and market data insights. We see the
integration of BMI and our expansion into the forecourt sector as exciting
business accelerators.
Key Developments
· The migration to our SmartVend vending management platform, set to be
completed by Summer 2024, is being well received. It promises significant
operational benefits, leading to new installations as operators recognise the
advantages of an integrated system and a fully connected vending estate. This
will further cement Smart Machines' position as the market's leading
end-to-end solution.
· Our proactive approach to the MNO 3G Switch and competitive Suresite
transaction rates are enhancing customer retention and attracting new
business, securing long-term recurring income.
· Material progress in the forecourt sector with our contactless
payment solutions, including a recent major contract for approximately 800
devices that signals exciting growth potential.
· Despite economic challenges, the Smart Zones division is poised for
growth in the UK and USA hospitality markets, driven by the launch of our
Beverage Metrics bar management solution and energy-saving initiatives.
· The growing scope of unattended retail, the demand for machine
connectivity solutions, and contactless payment systems are driving new sales
opportunities, which we are actively addressing with support from our key
partners.
The Board remains optimistic that the increasing relevance of our products
will continue to drive growth, high-quality recurring income and cash
generation and positions us well to continue delivering sustainable growth for
our shareholders whilst successfully addressing new strategic opportunities.
James Dickson
Chairman &
CEO
12 December 2023
Chief Financial Officer's Review
Our operational cash generation before working capital adjustments stood at
£1.26m, continuing our track record of strong cash conversion, approximately
104% of EBITDA (H1 2023: £1.43m), even after accounting for BMI costs. Post
working capital adjustments, our cash generation increased to £1.29m (H1
2023: £0.71m), over 105% of EBITDA. A significant boost came from a £922k
tax rebate, raising our post-working capital figure to £2.21m, which is over
181% of EBITDA. Our working capital remained stable during this period, and we
are seeing a return to the healthy profit-to-cash conversion trends typical
for our business.
On 1 August, we transitioned to more flexible banking facilities, which have a
more favourable repayment profile than the previous CBIL loans, easing our
cash requirements.
Despite economic uncertainties, the progress we have made, together with our
new banking facilities give us confidence in a robust cash flow trajectory to
support our business operations. At the half-year, our net debt position
improved to £2.09m (H1 2023: £3.56m), a result of solid trade performance,
tax rebate, and the benefits of our new banking arrangements. Our gross debt
was at £3.42m (H1 2023: £4.01m). We anticipate this positive trend will
continue.
Exceptional costs were £0.33m (H1 2023: £0.04m), primarily due to BMI
acquisition-related expenses.
Smart Machines
Turnover was £3.05m (H1 2023: £3.00m). Recurring revenue grew by £0.11m, 5%
in the period and remained strong at over 77% (H1 2023: c76%).
Smart Zones
Our core draught beer monitoring operations turnover of £4.14m (H1 2023:
£4.18m), is a resilient overall performance, with a strong base of recurring
revenue accounting for over 94% of the total (H1 2023: 93%)
In the UK, pre-exceptional profit reached £1.97m (H1 2022: £1.81m),
representing growth of around 4%. Including the US operations and considering
the post-acquisition costs of BMI, the Smart Zones division's overall profit
for H1 was £1.71m.
Looking Forward
Despite the ongoing economic uncertainties and the challenges of transitioning
from 3G to 4G in H1, it is encouraging to see the business achieve solid
year-on-year growth. This success is supported by the commercial opportunities
in both existing and new sectors, coupled with more flexible banking
facilities, bolstering our confidence in our growth plans.
Mark Foster
Chief Financial
Officer
12 December 2023.
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2023
Total Unaudited Total Unaudited Audited
6 months 6 months Year
Before Exceptional Before Exceptional
6 months 6 months
Ended Ended Ended Ended Ended
30 Sept 30 Sept 30 Sept 30 Sept 31 March
2023 2023 2022 2022 2023
Note £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue 3 7,194 7,194 7,181 7,181 14,115
Cost of sales (2,203) (2,203) (2,574) (2,574) (4,737)
Gross profit 4,991 4,991 4,607 4,607 9,378
Administration and other operating expenses 4
(3,694) (4,024) (3,397) (3,439) (6,395)
Operating profit pre amortisation and share based payments 3
1,297 967 1,210 1,168 2,983
Intangible asset amortisation
(1,042) (1,042) (1,170) (1,170) (2,254)
Share based payments
(20) (20) (42) (42) (71)
Operating profit/(loss) post amortisation and share based payments
235 (95) (2) (44) 658
Net finance costs
(76) (76) (63) (63) (206)
Profit/(Loss) from continuing operations before tax
159 (171) (65) (107) 452
Income tax credit/(charge) 5 - - 30 30 (291)
Profit/(Loss) and other comprehensive income for the year 3
159 (171) (35) (77) 161
Loss/earnings per share
Continuing Operations
- Basic 6 (0.58p) (0.27p) 0.56p
- Diluted 6 (0.58p) (0.27p) 0.56p
Consolidated Balance Sheet
At 30 September 2023
Unaudited Unaudited Audited
As at As at As at
30 Sept 30 Sept 31 March 2023
2023 2022
£'000 £'000 £'000
Assets
Non-current assets
Intangible assets 23,495 23,597 23,281
Property, plant and equipment 3,249 3,265 3,370
Deferred Tax asset - 416 -
Total non-current assets 26,744 27,278 26,651
Current assets
Inventories 2,371 1,846 2,275
Trade and other receivables 3,295 2,948 3,781
Cash and cash equivalents 1,323 449 69
6,989 5,243 6,125
Total assets 33,733 32,521 32,776
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables 2,892 2,798 2,348
Borrowings 206 2,143 1,925
Leases 50 13 70
3,148 4,954 4,343
Non-current liabilities
Deferred tax liability 827 - 827
Borrowings 3,209 1,867 1,517
Leases 124 - 122
4,160 1,867 2,466
Equity attributable to owners of the parent
Share capital 2,955 2,880 2,880
Share premium account 11,737 11,711 11,711
Capital redemption 15 15 15
Share based payment reserve 583 541 563
Merger reserve 818 310 310
Retained profit 10,317 10,243 10,488
Total equity 26,425 25,700 25,967
Total equity and liabilities 33,733 32,521 32,776
Summarised Consolidated Cash Flow Statement
For the six months ended 30 September 2023
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2023 2022 2023
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit for the period (171) (77) 161
Adjustments for
Net Interest payable 76 63 206
Income tax (credit)/charge - (30) 1,213
Amortisation of intangible assets 1,042 1,170 2,254
Depreciation 273 243 519
Loss on sale of property, plant and equipment 23 15 24
Share-based payments expense 20 42 71
Operating cashflow before changes in
working capital and provisions 1,263 1,426 4,448
Change in inventories (96) (273) (702)
Change in receivables (418) (258) (1,091)
Change in payables 540 (185) (618)
26 (716) (2,411)
Net cash from operating activities 1,289 710 2,037
Income tax refund 922 - -
Net cash from operating activities 2,211 710 2,037
Purchases of property, plant and equipment (175) (260) (651)
Purchase of intangible assets (695) (936) (1,699)
Purchases of other intangible assets - - (4)
Net cash from/(used) in investing activities (870) (1,196) (2,354)
Cash flows used in financing activities
Net Interest payable (76) (63) (206)
Issue of share capital 32 - -
New leases 31 231
Repayment of leases (49) (12) (65)
New borrowings 3,440 - -
Repayments of borrowings (2,297) (558) (992)
Payment of contingent consideration - - (16)
Net cash from/(used in) financing activities 1,081 (633) (1,048)
Net increase/(decrease) in cash and cash equivalents 2,422 (1,119) (1,365)
Cash and cash equivalents at beginning of period (1,099) 266 266
Cash and cash equivalents at end of period 1,323 (853) (1,099)
Reconciliation to the cash balance in the Consolidated Balance Sheet
Cash balance as per consolidated balance sheet 1,323 449 69
Bank overdrafts - (1,302) (1,168)
Balance per statement of cash flows 1,323 (853) (1,099)
Statement of changes in equity
Six months ended 30 September 2023
Share Share Share based payment reserve Merger Retained profit Total
capital premium reserve Capital
account Redemption
£000 £000 £000 £000 £000 £000 £000
At 1 April 2023 2,880 11,711 563 310 15 10,488 25,967
Share based payment - - 20 - - - 20
Issue of share capital 75 26 - 508 - - 609
Transactions with owners 75 26 20 508 - - 629
Loss and total comprehensive expense for the period - - - -
- (171) (171)
Total comprehensive incomeless owners transactions 75 26 20 508 (171) 458
-
At 30 September 2023 2,955 11,737 583 818 15 10,317 26,425
Six months ended 30 September 2022
Share Share Share based payment reserve Merger Retained profit Total
capital premium reserve Capital
account Redemption
£000 £000 £000 £000 £000 £000 £000
At 1 April 2022 2,880 11,711 499 310 15 10,320 25,735
Share based payment - - 42 - - - 42
Issue of share capital - - - - - - -
Transactions with owners - - 42 - - - 42
Loss and total comprehensive expense for the period - - - -
- (77) (77)
Total comprehensive income less owners transactions - -
- 42 - (77) (35)
At 30 September 2022 2,880 11,711 541 310 10,243 25,700
15
12 months ended 31 March 2023
Share Share Share based payment reserve Merger Retained profit Total
capital premium reserve Capital
account Redemption
£000 £000 £000 £000 £000 £000 £000
At 1 April 2022 2,880 11,711 499 310 15 10,320 25,735
Issue of shares - - - - - - -
Cancellation of shares - - - - - -
Share option forfeitures - - (7) - - 7 -
Share based payment - - 71 - - - 71
Transactions with owners
- - 64 - - 7 71
Profit and total comprehensive income for the year - - - - - 161 161
Total comprehensive income less owners transactions - - 64 - 168 232
-
At 31 March 2023 2,880 11,711 563 310 15 10,488 25,967
Notes to the interim report
1. Statutory information
The interim financial statements are neither audited nor reviewed and do not
constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006.
The financial information for the year ended 31 March 2023 has been derived
from the published statutory accounts. A copy of the full accounts for that
period, on which the auditor issued an unmodified report that did not contain
statements under 498(2) or (3) of the Companies Act 2006, has been delivered
to the Registrar of Companies.
These interim financial statements will be posted to all shareholders and are
available from the registered office at One Surtees Way, Surtees Business
Park, Stockton on Tees, TS18 3HR or from our website at
www.vianetplc.com/investors.
2. Accounting policies
The interim financial statements have been prepared in accordance with the AIM
Rules for Companies and on a basis consistent with the accounting policies and
methods of computation as published by the Group in its Annual Report for the
year ended 31 March 2023, which is available on the Group's website.
The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in
preparing these interim financial statements and therefore the Interim
financial information is not in full compliance with International Financial
Reporting Standards.
Having considered current trading performance and change of bank facilities on
1 August 2023, the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for
the foreseeable future. Financial forecasts and projections, taking account of
reasonably possible changes and sensitivities in future trading performance
and the market value of the Group's assets, have been prepared and show that
the Group is expected to be able to operate within the level of cash and
existing banking facilities.
The Directors are confident that the Company will be able to meet its
liabilities as they fall due over the next 12 months and beyond. As a result,
this financial information has been prepared on a going concern basis.
3. Segmental information
An operating segment is a component of an entity that engages in business
activities from which it may earn revenues and incur expenses. The segment
operating results are regularly reviewed by the Chief Operating Decision Maker
to make decisions about resources to be allocated to the segment and assess
its performance. Vianet Group is analysed into to two trading segments
(defined below) being Smart Zones (mainly adopted in the leisure sector,
including USA (particularly in pubs and bars)) and Smart Machines (mainly
adopted in the vending sector (particularly in unattended retail vending
machines)) supported by Corporate/Technology & Stores costs.
The products/services offered by each operating segment are:
· Smart Zones: Data insight & actionable data services, design,
product development, sale and rental of fluid monitoring equipment.
· Smart Machines: Data insight & actionable data services, design
product development, sale and rental of machine monitoring and contactless
payment equipment and services.
· Corporate/Technology: Centralised Group overheads along with
technology and stores related costs for the Group.
The inter-segment sales are immaterial. Segment results, assets and
liabilities include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated assets and
liabilities comprise items such as cash and cash equivalents, certain
intangible assets, taxation, and borrowings. Segment capital expenditure is
the total cost incurred during the year to acquire segment assets that are
expected to be used for more than one period.
The segmental results for the six months ended 30 September 2023 are as
follows:
Continuing Operations Smart Zones Smart Machines Corporate/Technology
Total
£'000 £'000 £'000 £'000
Total revenue 4,144 3,050 - 7,194
Profit/(loss) before amortisation, share based payments and exceptional costs
1,711 1,048 (1,462) 1,297
Pre-exceptional segment result 1,384 866 (2,015) 235
Exceptional costs (155) - (175) (330)
Post exceptional segment result 1,229 866 (2,190) (95)
Finance income - - - -
Finance costs (76) - - (76)
Profit/(loss) before taxation 1,153 866 (2,190) (171)
Taxation -
Loss for the year from continuing operations (171)
Smart Zones Smart Machines Corporate/Technology
Total
£'000 £'000 £'000 £'000
Segment assets 29,552 4,083 98 33,733
Unallocated assets - - - -
Total assets 29,552 4,083 98 33,733
Segment liabilities 6,290 - 191 6,481
Unallocated assets - - 827 827
Total liabilities 6,290 - 1,018 7,308
Notes to the interim report (continued)
The segmental results for the six months ended 30 September 2022 are as
follows:
Continuing Operations Smart Zones Smart Machines Corporate/Technology
Total
£'000 £'000 £'000 £'000
Total revenue 4,175 3,006 - 7,181
Profit/(loss) before amortisation, share based payments and exceptional costs
1,814 814 (1,418) 1,210
Pre-exceptional segment result 1,519 652 (2,173) (2)
Exceptional costs - (19) (23) (42)
Post exceptional segment result 1,519 633 (2,196) (44)
Finance income - - - -
Finance costs (63) - - (63)
Profit/(loss) before taxation 1,456 633 (2,196) (107)
Taxation 30
Loss for the year from continuing operations (77)
Smart Zones Smart Machines Corporate/Technology
Total
£'000 £'000 £'000 £'000
Segment assets 27,614 4,083 408 32,105
Unallocated assets - - 416 416
Total assets 27,614 4,083 824 32,521
Segment liabilities 6,647 - 174 6,821
Unallocated assets - - - -
Total liabilities 6,647 - 174 6,821
Notes to the interim report (continued)
The segmental results for the 12 months ended 31 March 2023 are as follows:
Continuing Operations Smart Zones Smart Machines Corporate/ Technology
Total
£'000 £'000 £'000 £'000
Total revenue 8,163 5,952 - 14,115
Profit/(loss) before amortisation, share based payments and exceptional costs
3,423 2,012 (2,330) 3,105
Pre-exceptional segment result 3,174 1,667 (4,061) 780
Exceptional costs - (19) (103) (122)
Post exceptional segment result 3,174 1,648 (4,164) 658
Finance costs (206) - - (206)
Profit/(loss) before taxation 2,968 1,648 (4,164) 452
Taxation (291)
Profit for the year from continuing operations 161
Smart Zones Smart Machines Corporate/ Technology
Total
£'000 £'000 £'000 £'000
Segment assets 28,593 4,083 100 32,776
Unallocated assets - - - -
Total assets 28,593 4,083 100 32,776
Segment liabilities 5,743 - 239 5,982
Unallocated assets - - 827 827
Total liabilities 5,743 - 1,066 6,809
Notes to the interim report (continued)
4. Exceptional items
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2023 2022 2023
£'000 £'000 £'000
Corporate activity and Acquisition costs 254 23 103
Corporate restructuring and transitional costs 26 18 17
Contingent consideration costs - - -
Bank facility restructure 50 - -
Other - 1 2
330 42 122
Corporate activity and acquisition costs relate to the trade and asset
acquisition of Beverage Metrics Inc. in the main. Corporate restructuring
and transitional costs relate to the transition of people and management to
ensure we have the succession and calibre of people on board to deliver the
strategic aims and aspirations of the Group.
5. Tax
The charge/(credit) for tax is based on the profit/(loss) for the period and
comprises:
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2023 2022 2023
£'000 £'000 £'000
United Kingdom corporation tax - 30 (291)
No tax charge provision is made given the tax losses brought forward and the
immaterial likely deferred tax position. The tax credit for Sept 22 reflects
the utilisation of brought forward trading losses, which had previously been
recognised as a deferred tax asset, against the taxable profit for the period
within Vianet Limited.
6. Loss per share
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders (loss of £171k) by the weighted average number of
ordinary shares outstanding during the period.
Diluted earnings per share are calculated on the basis of loss for the year
after tax divided by the weighted average number of shares in issue in the
year plus the weighted average number of shares which would be issued if all
the options granted were exercised.
The table below shows the earnings per share result.
30 September 2023 30 September 2022
(Loss) Basic (loss) per share Diluted (loss) per share (Loss) Basic (loss) per share Diluted (loss) per share
£000 £000
Post-tax loss attributable to equity shareholders (171) (0.58p) (0.58p) (77) (0.27p) (0.27p)
Operating profit 1,297 - - 1,210 - -
Operating profit pre BMI costs 1,475 - - N/A - -
Post tax profit attributable to equity shareholders pre BMI costs 7 0.02p 0.02p N/A N/A N/A
30 Sept 30 Sept
2023 2022
Number Number
Weighted average number of ordinary shares 29,353,449 28,808,914
Dilutive effect of share options - -
Diluted weighted average number of ordinary shares 29,353,449 28,808,914
Due to the loss in the period no dilutive effect of share options is required
to be calculated.
INDEPENDENT REVIEW REPORT TO VIANET GROUP PLC
For H1 2023, we have chosen not to undertake an independent audit review which
is an agreed standard approach.
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