REG - Vianet Group PLC - Trading Update and Notice of Results

VianetAnnouncement

01/11/2023 07:15

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RNS Number : 9558R  Vianet Group PLC  01 November 2023

1 November 2023

 

 

Vianet Group plc

 

("Vianet" or the "Group")

 

Trading Update and Notice of Results

 

Vianet Group plc (AIM: VNET), the international provider of actionable data
and business insight through our ecosystem of connected hardware devices,
management software platforms, and smart insights portal, today announces a
trading update, and notifies that it will release its results for the six
months ended 30 September 2023 on Tuesday, 12 December 2023.

Financial and Operational Update

The Group is starting to reap the benefits of its strong recurring revenues,
which stand at 87%, and healthy gross margins with profit for H1 2024 in line
with management's expectations, with 7.4% growth in EBITA to £1.30m (H1 2023:
£1.21m) net of £0.2m support for newly acquired Beverage Metrics.

 

Highlights:

·    H1 2024 revenue increased to £7.19m (H1 2023: £7.18m)

·    Recurring revenue remained strong at 87% (H1 2023: 86%)

·    Gross Margin was very healthy and increased by 7.8% to 69% (H1 2023:
64%)

·    Loss Before Tax of £171k net of a £200k investment in the recently
acquired Beverage Metrics

·    PBT on a like-for-like basis £29k (H1 2023: loss £106k)

·    Smart Machines division experienced modest revenue growth to £3.05m
(H1 2023: £3.00m). This is very encouraging given the industry-wide delays
due to the replacement plans for 3G being finalised. The management team is
confident that 3G replacement is on plan.

 

In the period, we were delighted to receive a refund of £924,774 from HMRC,
strengthening the Group's cash position. Furthermore, our recent re-financing
agreement with HSBC for new banking facilities, including their commitment to
support our growth agenda, further strengthens the Company's liquidity
position as we pursue our growth strategy to deliver value to our
shareholders.

Market Developments

In H1 2024 the business traded in line with management's expectations. New
initiatives are delivering new customers, solidifying existing relationships
and broadening the range of services we offer. Our efforts to expand in new
industry verticals are also proving successful and we continue to build on
these exciting opportunities, and in particular with manufacturers and
retailers in the forecourt sector.

The most recent success was October's significant contract win in partnership
with Suresite Card Services, to supply c 800 Trio IQ Smart Contact Pro to an
established forecourt retailer.

High inflation and customers' focus on addressing connectivity issues on the
"3G switch-off" have had the anticipated impact of being a drag on new
installations in H1. However, the underlying trends remain positive. Our
strong customer relationships give us the visibility to see an acceleration in
H2 revenue from both customer upgrades to 4G LTE and recent contract wins.

In Smart Machines, our response to the network operators' transition from 3G
has been well received by customers. This has translated into new contracts
and orders for 4G LTE readers from both our existing and new customers for
delivery in H2 2024.

The continued collaboration with Oxford Partnership in Smart Zones has
delivered positive results with the successful launch of a new insights and
reporting portal. This initiative is proving extremely popular with
hospitality industry customers. We have extended several existing agreements
and secured several new contracts, which will benefit from in H2 2024.

James Dickson, Chair & CEO of Vianet commented:

 

"Over the past three years, the Group has strategically and deliberately taken
actions aimed at reclaiming the Company's pre-Covid position and seizing the
opportunities that emerged from the pandemic. Our investments in sales,
technology, new market verticals, expanded product lines, and collaborations
provide a solid platform for growth.

New partnerships with Vendekin Technologies, announced in March, and the
agreement with Suresite are unlocking substantial new market opportunities
with well-established participants. This presents the team with the
opportunity to expand both market share and revenue. 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 our offered solutions are being
positively received by our customers. This remains a very exciting opportunity
for our Smart Machines division. The team anticipates strong H2 activity and
is increasingly confident in our ability to double the size of this part of
the business by the end of 2025.

The acquisition of US-based Beverage Metrics Inc was completed in May and is
performing in line with our expectations. Whilst it remains loss-making in the
short term, it has not only increased our presence in the USA but has
fast-tracked our hospitality product roadmap by approximately 12-18 months.
This will facilitate the expansion of our footprint in a large addressable
market in the USA together with UK expansion.

As a result, the Group remains exceptionally well-positioned to continue to
deliver growth in recurring revenues and earnings, generate strong free cash
flow and distribute dividends. As we continue to execute our long-term
strategic plan and explore future strategic opportunities for Vianet, I look
forward to the future with much optimism and confidence."

 

- Ends -

 

For more information please contact:

 Vianet Group plc
 James Dickson, Chairman & Inter 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 7220 0500
                                          www.cavendish.com (http://www.cavendish.com/)

 

About Vianet

Vianet Group is a leading provider of actionable management information and
business insight created through combining data from our smart Internet of
Things ('IOT') solutions and external information sources.

Since Admission to AIM in 2006, the Group has grown from its core beer
monitoring business both organically and through strategic acquisitions to
widen its offering and develop new businesses, especially in vending telemetry
and contactless payment solutions particularly for the premium coffee sector.

Servicing over three hundred customers across the world and rendering live
data to our IOT platform from over 250,000 connected machines daily, Vianet is
one of the largest business to business (b2b) connected solutions providers in
Europe with established long-term relationships with blue chip customers and
growing recurring revenues which are over 85% of our total revenues.

In our Smart Machines division, we connect a single data gathering device
with its own on-board communication capability to a customer's asset or
system. The device then sends data back via our IOT platform to cloud based
servers. The technology was originally developed for automated retailing
machines; however, the flexibility and functionality of the device means the
technology can be applied to any machine which has the capability to output
data. The device is also used to connect our contactless payment solution and
communicate payment terms to our cloud-based payment services providers where
that application is also required.

The Smart Zones division is where we connect multiple data gathering devices
into one or more systems or assets with the data from those devices being
communicated back to our IOT platform and cloud-based servers via a single 3G
communications hub. The technology was originally developed for flow
monitoring devices, temperature sensors, and asset management in drinks
retailing but any data gathering device with a digital output could be
connected to the communications hub where required such as gaming machines,
utilities management and EPOS.

For further information, please visit www.vianetplc.com
(http://www.vianetplc.com/)

 

 

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