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

VianetAnnouncement

28/04/2022 07:00

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RNS Number : 6052J  Vianet Group PLC  28 April 2022

 

28 April 2022

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 devices connected to its Internet of Things
platform ("IOT"), today announces the following trading update, and notifies
that it will release its results for the year ended 31 March 2022 on Tuesday,
14 June 2022.

 

About Us and What We Do

 

Vianet is an international provider of internet enabled, cloud based,
telemetric services to the hospitality, unattended retail vending, and remote
asset management sectors.

 

The Group's Smart Zones division provides unparalleled product quality and
waste management, business intelligence and stock management services to the
drinks retailing industry.

 

Our Smart Machines division provides innovative real time monitoring, software
management applications, business intelligence and data insights for
unattended vending machines that significantly improve operational efficiency,
stock control, sales, and cash flow, whilst also reducing our customers'
carbon footprint.

 

Market Developments

 

The positive momentum experienced by the Smart Zones division in Q2 as
COVID-19 restrictions eased has continued through H2. The majority of the
Group's customers are now fully operational and, although conditions remain
difficult for operators in some segments of the hospitality industry, this has
resulted in a strong rebound in our revenues over the second half of the year.

 

In the Smart Machines division, two material contract wins, the gradual
re-opening of city centres and the continued demand for cashless vending
solutions have resulted in new sales and an increase of over 20% in total
connected devices. This has further contributed towards our strong H2
performance.

 

We continue to work with our suppliers to mitigate the impact of the global
semi-conductor supply shortages on customer installation programmes. Whilst
supply is being maintained, we are now paying increasingly higher premiums for
certain components of our hardware, and this is expected to continue through
FY2023. Where customer terms allow, we seek to recoup these additional
hardware costs however the overriding commercial imperative is to keep the
sales pipeline flowing to grow the installation footprint and corresponding
recurring income.

 

Operational and Financial Updates

 

We are pleased to confirm the strong recovery in the Group's revenues through
H2, with full year turnover expected to be up 55% to almost £13.0m (FY 2021:
£8.4m and FY 2020: £16.3m). This is a welcome result given that hospitality
restrictions ran longer into the year than anticipated and whilst ongoing city
centre economic recovery remains muted.

 

New contract wins and device sales are encouraging and the recurring revenues
from long term customers remains high at over 85% of turnover.

 

Operating profit is anticipated to be £2.2m (FY 2021: £0.7m loss and FY
2020: £4.0m) which is in line with market expectations.

 

Over the past two years, we have worked closely with our customers, and
focused on managing our cash whilst maintaining investment. We remain
committed to our strategy of the development and delivery of our product
roadmap to improve the quality of our existing revenue streams, and to take
advantage of the exciting growth opportunities we see ahead.

 

The Group's strong recurring revenue base and new sales momentum will underpin
the funding required to support our ongoing business requirements as well as
our planned investment for a sustained period.

 

Whilst cash generation continues to improve, the Board is mindful that the
well-publicised deterioration of semi-conductor supply globally will result in
component premiums through FY2023. In these circumstances the Board believes
it is prudent to preserve cash to invest in stock to underpin new sales and
drive continued growth in quality recurring income. We therefore expect to
delay reinstating a dividend until we have clear line of sight on a return to
more normal semi-conductor supply.

 

James Dickson, Chairman of Vianet, commented:

"Against a challenging backdrop I am pleased that the full year sales line
recovered to over 80 per cent. of pre-pandemic levels despite the longer than
expected timeframe of restrictions being in place and importantly we have
maintained strong momentum into the current year.

 

"Whilst component supply chain pressures are likely to have some impact on
hardware installation margins into 2023, we are excited about our sales
pipeline and the opportunity we have to significantly grow our high-quality
recurring income streams."

 

- Ends -

 

Enquiries:

 Vianet Group plc
 James Dickson, Chairman & Interim CEO      Tel: +44 (0) 1642 358 800

 Mark Foster, CFO                           www.vianetplc.com (http://www.vianetplc.com)

 Cenkos Securities plc
 Stephen Keys / Camilla Hume                Tel: +44 (0) 20 7397 8900
                                            www.cenkos.com (http://www.cenkos.com)

Media enquiries:

 Yellow Jersey PR
 Sarah Hollins                        Tel: +44 (0)7764 947 137

 Henry Wilkinson                      Tel: +44 (0)7951 402 336

 vianet@yellowjerseypr.com   www.yellowjerseypr.com (http://www.yellowjerseypr.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 300 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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