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

VianetAnnouncement

26/10/2022 07:00

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RNS Number : 0952E  Vianet Group PLC  26 October 2022

Final

26 October 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 six months ended 30 September 2022 on
Tuesday, 6 December 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. We enable customers to maximise the conversion of
inventory and services into sales, cash, and profit growth.

The Group's Smart Zones division provides product quality, waste management,
business intelligence and inventory management services to the on-premise
drinks retailing industry.

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

Market Developments

The positive momentum in our Smart Zones division in FY2022, as COVID-19
restrictions eased, has continued through H1 2023. The Group's hospitality
sector customers are now fully operational on 100% billing, and this has
resulted in a strong rebound in year-on-year revenues.

UK-wide hospitality staff shortages, supply chain pressures and the current
high cost of living mean that conditions remain challenging for operators.
This has, however, led to an increased demand for our data and analysis as the
requirement for operators to have a detailed understanding of actual trading
at the outlet level is particularly acute during challenging times.

In the Smart Machines division, the team continue to win new contracts and
build the Group's order pipeline.   Continued demand for our end-to-end
vending management solution and cashless vending solutions has resulted in a
footprint of 52,490 vending connections in H1 2023, up almost 24% on H1
2022.

Financial and Operational Update

Trading in H1 2023 produced a substantial turn-around against last year with c
48% growth in EBITA to £1.21m (H1 2022: £0.81m)

·    H1 2023 revenue of £7.18m, an uplift of 13.3% year on year (H1 2022:
£6.34m)

·    Recurring revenue increased to 86% (H1 2022: 83%)

·    Gross Margin remains strong at 64%

·    PBT was a £106k loss (H1 2022: loss £363k) following the final
write-down of £178k relating to the Vendman acquisition.

The improved results were primarily driven by revenue growth of 14.5% in Smart
Machines and 12.4% in Smart Zones, with a recovery in activity levels in the
Company's major end-user markets gathering momentum. We are confident that our
sales will continue to grow and that we will return to pre-pandemic monthly
run rates in FY2023.

Despite pressure on global semi-conductor supply chains, management action has
resulted in no material impact on delivery schedules; however, certain
component costs have increased significantly, and this is expected to continue
into FY2024. Our overriding commercial imperative is to keep the sales
pipeline flowing to grow the installation footprint and corresponding
recurring income, and we actively seek to recoup additional costs wherever
terms allow.

Stable gross margins in H1 2023 reflect the focus on extending our
installation footprint to drive recurring income and develop a valuable data
lake which we are beginning to monetise.

The Board expects further improved results and sales growth in H2 2023. A
significant new product release is scheduled for November and will establish
SmartVend as the industry-leading vending management software platform.

The Group's cash generation continues to improve, although the deterioration
of semi-conductor supply chain globally will result in component premiums
through FY2023. As such, for now, the Board believes it is prudent to preserve
cash to invest in stock to underpin new sales and drive continued growth in
quality recurring revenues. We hope to have a clear line of sight on a more
normal level of semiconductor supply ahead of our FY results announcement at
which time the Board will review its aspiration to resume payment of a  full
year dividend.

James Dickson, Chairman & CEO of Vianet, commented:

"A strong team performance has meant we could deliver our goals for this
period despite increasing supply chain and market challenges.

Against this difficult economic backdrop, I am pleased that half-year sales
recovered to over 85 per cent. of pre-pandemic levels, with good momentum into
the second half.

Component supply chain pressures are likely to have some impact on hardware
margins into FY2024 and whilst we cannot escape the impact of that, the whole
team is working hard to mitigate any such impact. Importantly, we have an
exciting sales pipeline and the opportunity to significantly grow our
high-quality recurring income streams. We are in good shape to move forward
and deliver further improved results in the second half of this financial year
and beyond."

- Ends -

 This announcement contains inside information.

Enquiries:

 Vianet Group plc
 James Dickson, Chairman & 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)

Investor enquiries:

 Dale Bellis           Tel: +44 (0) 20 7397 8900

 

About Vianet

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

Since its 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 4G
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 POS.

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

 

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