TIDMVNET
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 GBP1.30m (H1 2023: GBP1.21m) net of
GBP0.2m support for newly acquired Beverage Metrics.
Highlights:
-- H1 2024 revenue increased to GBP7.19m (H1 2023: GBP7.18m)
-- 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 GBP171k net of a GBP200k investment in the
recently acquired Beverage Metrics
-- PBT on a like-for-like basis GBP29k (H1 2023: loss GBP106k)
-- Smart Machines division experienced modest revenue growth to
GBP3.05m (H1 2023: GBP3.00m). 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
GBP924,774 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 Tel: +44 (0) 1642
CEO 358 800
Mark Foster, CFO www.vianetplc.com
Cavendish Capital Markets Limited
Stephen Keys / Camilla Hume Tel: +44 (0) 20 7220
0500
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
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