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

VianetAnnouncement

04/11/2024 07:00

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RNS Number : 7162K  Vianet Group PLC  04 November 2024

04 November 2024

 

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 insights through an integrated ecosystem of connected hardware
devices, software platforms and smart insights portals, today announces a
trading update, and notifies that it will release its results for the six
months ended 30 September 2024 on Tuesday, 3 December 2024.

Financial and Operational Update

The Group's performance in H1 2025 reflects the strength of its business
model, with recurring revenues accounting for an impressive 84% of total
income and supported by healthy gross margins. EBITDA increased markedly by
26.6% to £1.55 million (H1 2024: £1.22 million), in line with management's
expectations. This growth comes after a strategic investment of £0.25 million
in our Beverage Metrics operations in the U.S., underscoring our commitment to
both strategic and geographical expansion.

Financial highlights:

·    Revenue Growth: H1 2025 revenue increased to £7.69m, up from £7.19m
in H1 2024.

·    Strong Recurring Revenue: H1 2025 recurring revenue of £6.45m
maintaining a solid 84% of total income (H1 2024: 87%)

·    Robust Gross Margin: Gross Margin remains very robust at 67% (H1
2024: 69%)

·    Increased Operating Profit: Adjusted operating profit rose 10.1% to
£1.43m (H1 2024: £1.3m)

·    Good Operational Cash Generation: Operational cash generation after
working capital was £1.92m (H1 2024: £1.28m) demonstrating strong cash
conversion at approximately 124% of EBITDA.

·    Reduced Net Debt: Net Debt has been reduced to £1.0m (H1 2024:
£2.09m) and cash balances increased to £2.25m (H1 2024: £1.32m)

These results underscore our strategic initiatives and operational efficiency,
positioning the Group well for continued growth and success in the upcoming
periods.

Market Developments

The Group's initiatives have driven continued customer acquisition and
strengthened existing relationships, building a solid sales pipeline to
support future recurring revenue growth. Our expansion into new industry
verticals is advancing well, particularly in the forecourt sector, where we
are seizing promising opportunities among manufacturers and retailers.

In our unattended retail division, we took a proactive approach to the
transition from 3G-to-4G which has led to a substantial pipeline for 4G LTE
readers. Although the slow pace of 3G shutdown by mobile network operators has
impacted short-term pipeline conversion, Smart Machines achieved a commendable
6.2% revenue growth. The anticipated 3G network shutdown, initially
anticipated for December 2024, is now expected in summer 2025, however our
contract extensions and footprint expansion with both new clients, such as
Lucozade, and existing clients leaves us strongly positioned for H2 2025 and
FY2026.

Our hospitality division posted a 7.3% year-on-year revenue increase,
bolstered by several long-term contract renewals and new client wins,
including Marston's. Ongoing collaborations with Fintech and Oxford
Partnership are yielding positive outcomes, enhancing our growth prospects in
the hospitality sector across the UK and the U.S.

James Dickson, Chair & CEO of Vianet commented:

"We are witnessing a notable improvement in the Group's performance, driven by
our strategic investments in sales, technology, new market verticals, and
expanded product lines. These initiatives, along with our strategic
partnerships, have established a strong foundation for growth, unlocking
exciting commercial opportunities across all areas of our business.

Our collaboration with Suresite, alongside the recent exit of a competitor is
creating substantial new opportunities within the unattended retail sector,
particularly in expanding our market share and subscription revenues. While
the slow pace of the 3G network shutdown presents certain short-term
challenges, it has not impeded our ability to build a strong pipeline. We
remain optimistic about our capacity to double the size of this business
within the next 18-24 months.

Our U.S. acquisition, Beverage Metrics Inc., acquired in May 2023, is now
fully integrated, enhancing our leading beverage management solution and
driving growth in both the UK and US hospitality markets.  With our U.S.
operations continuing to progress towards profitability, we are encouraged by
the advancements and high engagement levels in key customer pilot programs in
this significant market.

The strengthening of our balance sheet positions the Group to consistently
deliver growth in recurring revenues and earnings, generate strong free cash
flow, and support dividend distributions.

As we execute on our long-term strategic plan, I look ahead with great
optimism and confidence in our future. Thank you for your continued support"

- Ends -

For more information please contact:

 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 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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