REG - Vianet Group PLC - Interim Results <Origin Href="QuoteRef">VNET.L</Origin>
RNS Number : 5427YVianet Group PLC02 December 2014
Press Release
2 December 2014
Vianet Group plc
("Vianet" or "the Group")
Interim Results
Vianet Group plc (AIM:VNET), the leading provider of real time monitoring systems and data management services for the leisure, vending and forecourt services sectors, is pleased toannounce its interim results for the six months ended 30 September 2014.
Financial summary
Interim dividend maintained at 1.70 pence (H1 2014: 1.70 pence)
Revenue up 1.44% to 9.14 million (H1 2014: 9.01 million) supported by improved iDraughtTM and Vending sales
Operating profit before amortisation, share based payments and exceptional items up 16.9% to 1.52 million (H1 2014: 1.30 million)
Basic earnings per share (pre-exceptional items) at 2.97 pence (H1 2014: 3.37 pence), held back for the first time by a deferred tax adjustment of 1.04 pence
Vending Solutions operating profit of 0.28 million (H1 2014: 0.06 million)
Vianet Americas operating loss reduced to 0.17 million (H1 2014: 0.23 million)
Fuel Solutions operating profit of 0.004 million (H1 2014: loss 0.14 million)
Operational highlights
261 new iDraughtTMinstallations (H1 2014: 79 installations)
Vending division growth continues with 3,926 unit sales (H1 2014: 650 units) predominantly in coffee vending
Commenting on the interim results, James Dickson, Chairman of Vianet Group plc, said: "The Board is pleased that the Group's focus on growth areas has resulted in increased profits for the period. The Group's robust operational cash flow is underpinned by the resilience of Vianet's recurring revenue streams, particularly within the Leisure division, which has been augmented by improved iDraughtTM and vending telemetry sales whilst the Fuel Solutions division has moved into a small profit. Whilst aspects of the yet to be finalised Statutory Code for pub companies remain a distraction for a number of the Group's customers, the Board is encouraged by several recent iDraughtTM orders and the pipeline of potential opportunities.
"The Board remains confident that Vianet's long term strategy is appropriate and that the Group is capable of delivering consistent and sustained growth, within the parameters of its influence and control."
- Ends -
An audio cast of the interim results presentation given by James Dickson, Chairman, Stewart Darling, Chief Executive, and Mark Foster, Chief Financial Officer, was released this morning at 07.00hrs on Tuesday, 2 December 2014 on the Group's website www.vianetplc.com with the link also being distributed by Abchurch Communications.
Enquiries:
Vianet Group plc
James Dickson, Chairman
Tel: +44 (0) 1642 358 800
Cenkos Securities plc
Stephen Keys / Mark Connelly
Tel: +44 (0) 20 7397 8900
Media enquiries:
Abchurch Communications
Henry Harrison-Topham / Quincy Allan
Tel: +44 (0) 20 7398 7702
Chairman's Statement
I am pleased to report that the Group's focus on growth areas has resulted in increased profits for the six months to 30 September 2014, as compared to the same period last year. The resilience of Vianet's recurring revenue streams, particularly within the Leisure division, was augmented by improved iDraughtTM and vending telemetry sales whilst the Fuel Solutions division moved into a small profit.
Whilst aspects of the yet to be finalised Statutory Code for pub companies remain a distraction for a number of the Group's customers, the Board is encouraged by several recent iDraughtTM orders and the pipeline of potential opportunities.
These new iDraughtTM orders, together with the benefit of further cost reductions and efficiencies, continues to offset the impact of pub closures and, against that background, operating profit in the Leisure division was just 2% lower year on year at just over 2 million. In Vianet Americas, the streamlined iDraughtTM operation, helped by 23 new AMC Theatre installations, reduced its year on year losses.
Strong progress has been achieved in the Vending division, particularly with solutions for the coffee market, and the period saw a continued growth in profits. The Group's existing orders in this market segment are being installed successfully ahead of plan, and despite some project delays due to new corporate activity in the sector, the Board remains positive that further growth in vending telemetry will continue to be secured.
Performance of the Group's Fuel Solutions division continued to improve, achieving a profit in the period despite experiencing delays to certain contracts.
Results
The modest growth in turnover for the period to 9.14 million (H1 2014: 9.01 million) was principally due to increased iDraughtTM and Vending sales which more than offset the impact of pub closures, whilst Fuel Solutions division turnover was flat.
Group gross margin has increased from 57.5% in H1 2014 to 59.5% this year due to improved sales volume and on-going cost management.
The Group's profit before amortisation, share based payments and exceptional items amounted to 1.52 million (H1 2014: 1.30 million). The improvement is due to improved sales of iDraught and vending telemetry, reduced losses in USA and Fuel Solutions entering in to a small profit from a loss making position - this last factor involving a swing of 0.14 million year on year.
Group profit before taxation amounted to 0.77 million (H1 2014: 0.57 million).
Group EPS before exceptional costs and a deferred tax adjustment amounted to 4.01 pence (H1 2014: 3.37 pence), with a deferred tax adjustment of 0.28 million reducing EPS before exceptional costs and post deferred tax adjustment to 2.97 pence (H1 2014: 3.37 pence).
As reported at the full year results, a deferred tax asset provision was made to reflect the losses, as acquired with the original Vianet vending operations, and available to the Group, for offset against future profit generation. The deferred tax asset will be released proportionally against profits and the tax charge shown in the results represents the relevant proportion of that unwinding.
Dividend
Reflecting its continued confidence in the Group's medium term prospects and the strength of its operational cash flow, the Board is pleased to maintain the interim dividend at 1.70 pence per share (H2 2014: 1.70 pence per share), payable on 30 January 2015 to shareholders on the register as at the close of business on 12 December 2014. A final dividend of 4.00 pence per share was paid in respect of the year ended 31 March 2014 on 1 August 2014.
Outlook
As before, Vianet's growth and profitability is strongly influenced by factors affecting the UK pub sector. Given the Government's announcement on the Statutory Code in early June 2014, industry uncertainty has been diminishing resulting in a modest increase in the pace of new iDraughtTM sales as pub operators evaluated their investment plans in the new environment. However, further uncertainty has now been introduced with the House of Commons' recent narrow vote in favour of a Bill to introduce a market rent only option to the Statutory Code.
Whilst there are several hurdles facing the Bill, including potential legal challenges as it progresses through the parliamentary process, regardless of the outcome any change may be some way off. Though this development should have limited impact on the long term success of Vianet, the short term uncertainty is unwelcome as it may lead to some pub company investment temporarily being held back at a time when the Group was starting to witness a pickup in trading.
Further M & A activity in the pub sector may also have a short term dampening effect on new iDraughtTM volumes. Nonetheless, with the number of pub closures diminishing and the benefits of cost initiatives coming through, the outlook for the Group's core Leisure division is improving.
Elsewhere, vending telemetry continues to progress well, particularly in the coffee vending market and Fuel Solutions will likely show further gains in profitability in the second half of the year. The Group's operational cash flow is strong, underpinned by high levels of recurring revenue.
The Board remains confident that Vianet's long term strategy is appropriate and that the Group is capable of delivering consistent and sustained growth, within the parameters of its influence and control.
James W Dickson
Chairman
2 December 2014
Chief Executive and Chief Financial Officer Review
Against a backdrop of pub closures as well as other macroeconomic pressures on the UK consumer sector, the Group's strategy has been to reduce costs and increase sales of newer products such as iDraughtTM and coffee vending telemetry. That, combined with what was a satisfactory conclusion to the Statutory Code consultation, has resulted in the underlying trading outcome for the six months to 30 September 2014 showing some decent progress as set against the same point last year.
Group turnover, on a consolidated basis, has shown modest growth particularly in iDraughtTM and Vending, offset by the impact of pub closures; with Fuel Solutions remaining broadly flat. The proportion of recurring revenue within Group turnover remains high.
In the period, lower levels of exceptional costs are reported as expected. These principally relate to staff transition costs and amount to 0.32 million.
Cash generated from operations was up 0.34 million to 0.99 million (H1 2014: 0.65 million). As before, the core Leisure division generates the bulk of this operational cash flow which provides the Group with a strong financial base.
Against this background, the Group had an overall net debt of 2.85 million at 30 September 2014 (H1 2014: 2.23 million) impacted by a new 1.0 million three year term loan from July 2014.
Leisure Division
The underlying performance of the Group's core beer monitoring business remained robust over the period with a pickup in growth in iDraughtTM sales offset by continued pub closures. New agreements were secured with Hawthorne Group and Wadworth, in addition to continued iDraughtTM investment by existing customers. iDraughtTM now accounts for approximately 18% of the Group's beer monitoring base by number of installations and we expect that this percentage will continue to increase.
Over the period, the division made 268 new beer monitoring installations of which 261 were higher value iDraughtTM installations. This compares to 150 new installations in the corresponding period in 2014, including 79 for iDraughtTM. Despite this good growth year on year, this number still illustrates the hangover effect of the impact of the Statutory Code for the pub companies and their investment expenditure.
Furthermore, the industry has continued to see pub closures and disposals which have resulted in a net reduction of just over 300 sites to approximately 16,100 sites in the core Leisure installation base. For now however, this is a marked slowdown in the pace of reduction from the experience of the previous financial year.
Vianet remains confident for the future growth prospects for iDraughtTM in the UK, both in new installations for new customers and replacement systems for existing beer monitoring customers. However, the Group is equally mindful of the impact of continued uncertainty arising from Parliamentary deliberations on the Statutory Code.
In the USA, the ongoing roll out of iDraughtTM saw the installation base reach 184 sites at the period end. Whilst encouraged by continued strong interest from national retail chains, the Board remains conscious that further traction is required to achieve breakeven in 2015/16 and justify the case for further investment in the USA.
Vending Solutions
The Group's vending telemetry business continues to trade profitably with pre-exceptional profit of 0.28 million (H1 2014: 0.06 million). Whilst the division has been held back by vending estate rationalisation in its largest customer and some postponement of new sales because of corporate activity in a new prospect, solid improvement has been made in sales growth, with turnover increasing to 1.1 million in the period (H1 2014: 0.62 million).
In addition, there has been good dialogue and pilots commenced with potential major international customers for the Group's leading end-to-end vending telemetry solutions. The Group continues to be pleased with the customer interest in its leading edge coffee telemetry solutions which is being manifested in several new pilots beginning in the period under review.
Fuel Solutions
Fuel Solutions reported a small profit of 4,000 before exceptional costs in the period (H1 2014: loss 0.14 million). The division has benefitted from an improved mix of achieved margin within the portfolio of services provided as well as continued cost rationalisation. The Fuel Solutions division has continued to develop these higher margin products and services and expects growth to continue, allowing for the usual adverse seasonal impact of Christmas.
Given the challenges the Group has faced over recent years, the overall result and contribution from each main trading element of Leisure, Vending and Fuel Solutions has been pleasing, but it is not lost on the Board that there is still much to do, and still much to achieve from the potential of the products and services offered. Vianet continues to aspire to fulfil that potential, underpinned by an appropriate cost base.
Stewart Darling
Chief Executive
Mark Foster
Chief Financial Officer
2 December 2014
2 December 2014
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2014
Before
Exceptional items
6 months
Exceptional items
6 months
Total
Unaudited
6 months
Unaudited
6 months
Audited
Year
Ended
Ended
Ended
Ended
Ended
30 Sept
30 Sept
30 Sept
30 Sept
31 March
2014
2014
2014
2013
2014
Note
'000
'000
'000
'000
'000
Revenue
3
9,138
-
9,138
9,012
18,335
Cost of sales
(3,700)
-
(3,700)
(3,829)
(7,557)
Gross profit
5,438
-
5,438
5,183
10,778
Administration and other operating expenses
4
(3,923)
(317)
(4,240)
(4,219)
(8,439)
Profit before amortisation and share based payments
3
1,515
(317)
1,198
964
2,339
Intangible asset amortisation
(382)
-
(382)
(381)
(734)
Share based payments
(20)
-
(20)
10
10
Operating profit
1,113
(317)
796
593
1,615
Finance income
-
-
-
2
-
Finance costs
(30)
-
(30)
(28)
(52)
Profit before tax
1,083
(317)
766
567
1,563
Income tax (expense)/credit
5
(280)
-
(280)
-
1,570
Profit and total comprehensive income
for the period attributable
to the owners of the parent
3
803
(317)
486
567
3,133
Earnings per share
6
Basic
2.97p
(1.17)p
1.80p
2.10p
11.60p
Diluted
2.97p
(1.17)p
1.80p
2.10p
11.59p
Consolidated Balance Sheet
At 30 September 2014
Unaudited
As at
30 Sept
2014
Unaudited
As at
30 Sept
2013
Audited
As at
31 March
2014
'000
'000
'000
Assets
Non-current assets
Intangible assets
20,038
20,294
20,209
Property, plant and equipment
3,677
3,807
3,700
Total non-current assets
23,715
24,101
23,909
Current assets
Inventories
1,785
1,912
1,851
Trade and other receivables
4,038
3,587
3,835
Tax asset
1,177
30
1,443
Cash and cash equivalents
395
370
183
7,395
5,899
7,312
Total assets
31,110
30,000
31,221
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables
3,470
4,402
3,841
Borrowings
1,412
898
1,183
4,882
5,300
5,024
Non-current liabilities
Borrowings
1,836
1,697
1,245
Deferred tax
14
157
-
1,850
1,854
1,245
Equity attributable to owners of the parent
Share capital
2,827
2,827
2,827
Share premium account
11,182
11,182
11,182
Shares based payment reserve
198
298
293
Own shares
(1,381)
(1,381)
(1,381)
Merger reserve
310
310
310
Retained profit
11,242
9,610
11,721
Total equity
24,378
22,846
24,952
Total equity and liabilities
31,110
30,000
31,221
Summarised Consolidated Cash Flow Statement
For the six months ended 30 September 2014
Unaudited
6 months
Unaudited
6 months
Audited
Year
Ended
Ended
Ended
30 Sept
30 Sept
31 March
2014
2013
2014
'000
'000
'000
Cash flows from operating activities
Profit for the period
486
567
3,133
Adjustments for
Interest receivable
-
(2)
-
Interest payable
30
28
52
Income tax expense
280
-
(1,570)
Amortisation of intangible assets
382
381
734
Depreciation
257
255
522
Exceptional profit
-
(90)
(90)
Payment of deferred consideration
(20)
(19)
(20)
Loss on sale of property, plant and equipment
7
7
26
Share-based payments
20
(10)
(10)
Operating profit before changes in
working capital and provisions
1,442
1,117
2,777
Change in inventories
66
(38)
24
Change in receivables
(203)
75
(174)
Change in payables
(311)
(500)
(1,020)
(448)
(463)
(1,170)
Cash generated from operations
994
654
1,607
Income tax refunded
-
110
110
Net cash from operating activities
994
764
1,717
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment
3
8
19
Proceeds from disposal of investment
-
623
623
Purchases of property, plant and equipment
(243)
(265)
(455)
Purchase of intangible assets
(251)
(400)
(708)
Net cash used in investing activities
(491)
(34)
(521)
Cash flows from financing activities
Interest payable
(30)
(28)
(52)
Interest receivable
-
2
-
Repayments of borrowings
(450)
(450)
(900)
New borrowings
1,000
-
-
Dividends paid
(1,080)
(1,080)
(1,540)
Net cash used in financing activities
(560)
(1,556)
(2,492)
Net increase/(decrease) in cash and cash equivalents
(57)
(826)
(1,296)
Cash and cash equivalents at beginning of period
(100)
1,196
1,196
Cash and cash equivalents at end of period
(157)
370
(100)
Statement of changes in equity
Six months ended 30 September 2013
Share
capital
Share
premium
account
Share
based
payment
reserve
Own
shares
Merger
reserve
Retained
profit
Total
'000
'000
'000
'000
'000
'000
'000
At 1 April 2013
2,827
11,182
345
(1,381)
310
10,086
23,369
Dividends
-
-
-
-
-
(1,080)
(1,080)
Share based payment
-
-
(10)
-
-
-
(10)
Share option forfeitures
-
-
(37)
-
-
37
-
Transactions with owners
-
-
(47)
-
-
(1,043)
(1,090)
Profit and total comprehensive income for the period
-
-
-
-
-
567
567
Total comprehensive income less owners transactions
-
-
(47)
-
-
(476)
(523)
At 30 September 2013
2,827
11,182
298
(1,381)
310
9,610
22,846
12 months ended 31 March 2014
Share
capital
Share
premium
account
Share based payment reserve
Own shares
Merger
reserve
Retained profit
Total
'000
'000
'000
'000
'000
'000
'000
At 1 April 2013
2,827
11,182
345
(1,381)
310
10,086
23,369
Dividends
-
-
-
-
-
(1,540)
(1,540)
Share based payment
-
-
(10)
-
-
-
(10)
Share option forfeitures
-
-
(42)
-
-
42
-
Transactions with owners
-
-
(52)
-
-
(1,498)
(1,550)
Profit and total comprehensive income for the year
-
-
-
-
-
3,133
3,133
Total comprehensive income less owners transactions
-
-
(52)
-
-
1,635
1,583
At 31 March 2014
2,827
11,182
293
(1,381)
310
11,721
24,952
Six months ended 30 September 2014
Share
capital
Share
premium
account
Share based payment reserve
Own shares
Merger
reserve
Retained profit
Total
'000
'000
'000
'000
'000
'000
'000
At 1 April 2014
2,827
11,182
293
(1,381)
310
11,721
24,952
Dividends
-
-
-
-
-
(1,080)
(1,080)
Share based payment
-
-
20
-
-
-
20
Share option forfeitures
-
-
(115)
-
-
115
-
Transactions with owners
-
-
(95)
-
-
(965)
(1,060)
Profit and total comprehensive income for the period
-
-
-
-
-
486
486
Total comprehensive income less owners transactions
-
-
(95)
-
-
(479)
(574)
At 30 September 2014
2,827
11,182
198
(1,381)
310
11,242
24,378
Notes to the interim report
1. Statutory information
The interim financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The auditor's review report on the interim financial information for the six months ended 30 September 2014 is set out on page 13.
The financial information for the year ended 31 March 2014 has been derived from the published statutory accounts. A copy of the full accounts for that period, on which the auditor issued an unqualified 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
These interim financial statements are for the six months ended 30 September 2014. As is permitted, the Group has chosen not to adopt IAS 34 'Interim Financial Statements' and therefore the interim financial information is not in full compliance with International Financial Reporting Standards. They have been prepared using the recognition and measurement principles of IFRS as adopted by the European Union using the historic cost convention.
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. Leisure services is analysed into three segments - Leisure, Vending and Technology highlighting the three key divisions within Leisure. Vending and Technology do not meet the quantitative thresholds required for segmental reporting.
The products/services offered by each operating segment are:
Leisure: design, product development, sale and rental of fluid monitoring and machine monitoring equipment together with the provision of data management and related services.
Fuel Solutions: wetstock analysis and related services.
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, 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 2014 are as follows:
Continuing Operations
Leisure
Services
Vending
Technology
Fuel
Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Total revenue
6,006
1,078
69
1,985
-
9,138
Profit/(loss) before amortisation, share based payments and exceptional costs
2,020
283
(142)
4
(650)
1,515
Pre-exceptional segment result
1,925
152
(210)
(85)
(669)
1,113
Exceptional costs
(219)
(12)
(5)
(37)
(44)
(317)
Post exceptional segment result
1,706
140
(215)
(122)
(713)
796
Finance income
-
-
-
-
-
-
Finance costs
(16)
-
-
-
(14)
(30)
Profit/(loss) before taxation
1,690
140
(215)
(122)
(727)
766
Taxation
(280)
Profit for the period from continuing operations
486
Leisure Services
Vending
Technology
Fuel Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Segment assets
10,086
-
-
1,907
220
12,213
Unallocated assets
-
-
-
-
18,897
18,897
Total assets
10,086
-
-
1,907
19,117
31,110
Segment liabilities
5,768
-
-
801
163
6,732
Unallocated liabilities
-
-
-
-
-
-
Total liabilities
5,768
-
-
801
163
6,732
The asset base of the leisure division cannot be split across Vending and Technology.
The segmental results for the six months ended 30 September 2013 are as follows:
Continuing Operations
Leisure
Services
Vending
Technology
Fuel
Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Total revenue
6,257
615
113
2,027
-
9,012
Profit/(loss) before amortisation, share based payments and exceptional costs
2,066
61
(69)
(140)
(612)
1,306
Pre-exceptional segment result
1,975
(40)
(111)
(198)
(691)
935
Exceptional costs
(135)
(102)
-
(179)
74
(342)
Post exceptional segment result
1,840
(142)
(111)
(377)
(617)
593
Finance income
-
2
-
-
-
2
Finance costs
(10)
-
-
-
(18)
(28)
Profit/(loss) before taxation
1,830
(140)
(111)
(377)
(635)
567
Taxation
-
Profit for the period from continuing operations
567
Leisure Services
Vending
Technology
Fuel Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Segment assets
9,962
-
-
2,160
128
12,250
Unallocated assets
-
-
-
-
17,750
17,750
Total assets
9,962
-
-
2,160
17,878
30,000
Segment liabilities
5,868
-
-
1,034
95
6,997
Unallocated liabilities
-
-
-
-
157
157
Total liabilities
5,868
-
-
1,034
252
7,154
The asset base of the leisure division cannot be split across Vending and Technology.
The segmental results for the 12 months ended 31 March 2014 are as follows:
Continuing Operations
Leisure Services
Vending
Technology
Fuel Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Total revenue
12,451
1,509
187
4,188
-
18,335
Profit/(loss) before amortisation, share based payments and exceptional costs
4,264
353
(139)
(190)
(1,240)
3,048
Pre-exceptional segment result
4,084
137
(223)
(323)
(1,351)
2,324
Exceptional costs
(302)
(154)
(34)
(292)
73
(709)
Post exceptional segment result
3,782
(17)
(257)
(615)
(1,278)
1,615
Finance income
-
-
-
-
-
-
Finance costs
(21)
1
-
-
(32)
(52)
Profit/(loss) before taxation
3,761
(16)
(257)
(615)
(1,310)
1,563
Taxation
1,570
Profit for the year from continuing operations
3,133
Leisure Services
Vending
Technology
Fuel Solutions
Corporate
Total
'000
'000
'000
'000
'000
'000
Segment assets
9,679
-
-
2,246
135
12,060
Unallocated assets
-
-
-
-
19,161
19,161
Total assets
9,679
-
-
2,246
19,296
31,221
Segment liabilities
5,096
-
-
729
444
6,269
Unallocated liabilities
-
-
-
-
-
-
Total liabilities
5,096
-
-
729
444
6,269
The asset base of the leisure division cannot be split across Vending and Technology.
4. Exceptional items
6 months
6 months
Year
Ended
Ended
Ended
30 Sept
30 Sept
31 March
2014
2013
2014
'000
'000
'000
Exceptional costs
317
432
799
Exceptional credits
-
(90)
(90)
Net exceptional items
317
342
709
Exceptional costs principally relate to employee exit costs. Exceptional credits relate to the profit on disposal of Universe Group plc shares.
5. Tax
The charge for tax is based on the profit for the period and comprises:
6 months
6 months
Year
Ended
Ended
Ended
30 Sept
30 Sept
31 March
2014
2013
2014
'000
'000
'000
United Kingdom corporation tax
280
-
1,570
Tax charge relates to a partial release of deferred tax provision made at 31 March 2014 in relation to the losses available to Vianet Limited.
6. Earnings per share
Earnings per share is calculated on the profit after tax of 0.486 million (2013: 0.567 million) and the average number of shares in issue during the period of 26,993,684 (2013: 26,993,684).
Diluted earnings per share are calculated by taking the earnings as disclosed above and the average number of shares that would be issued on the full exercise of outstanding share options of 27,031,419 (2013: 27,030,246).
INDEPENDENT REVIEW REPORT TO VIANET GROUP PLC
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2014 which comprises the consolidated statement of comprehensive income, the consolidated balance sheet, the summarised consolidated cash flow statement, the statement of changes in equity and the related explanatory notes. We have read the other information contained in the half yearly financial report which comprises only the Chairman's Statement, Chief Executive and Chief Financial Officer Review and considered whether they contain any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in note 2, the annual financial statements of thegroup are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in note 2.
Our responsibility
Our responsibility is to express to the company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2014 is not prepared, in all material respects, in accordance with the basis of accounting described in note 2.
GRANT THORNTON UK LLP
AUDITOR
LEEDS
2 December 2014
- Ends -
This information is provided by RNSThe company news service from the London Stock ExchangeENDIR UARWRSRAURAA
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