Vianet Group PLC – Interim Results

Vianet Group PLC – Interim 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"), is pleased to announce its interim results for the six months ended 30 September 2019 ("H1 2020").


Financial summary


Revenue increase of 9.5% to £8.41 million (H1 2019: £7.68 million)

Recurring revenues at 82% (H1 2019: 88%)

Adjusted operating profit(a) up 11.1% to £2.00 million (H1 2019: £1.80 million)

Operating profit post exceptional items, pre amortisation and share based payments up 51.5% to £2.56 million (H1 2019: £1.69 million)

Pre-exceptional profit before tax up 7.3% at £1.19 million (H1 2019: £1.11 million)

Operational cash generation of £2.44 million (H1 2019: £0.72 million)(b)

Basic earnings per share up 96.7% at 6.00p (H1 2019: 3.05p), including a tax adjustment charge of 0.29p and the impact of the Vendman Systems Limited deferred consideration release (see note 4)

Net debt of £1.18 million (H1 2019: net debt £1.00 million(c)), debt reduced to £1.67 million (H1 2019: £2.33 million)

Interim dividend of 1.70p (H1 2019: 1.70p)


Divisional highlights


Smart Machines growth continues with new unit sales up 40.1% to 7,634 units (H1 2019: 5,427 units) and contactless payment sales up 21.1% at 4,796 units (H1 2019: 3,960 units)

Smart Machines adjusted operating profit(a) up 14.7% at £0.78 million (H1 2019: £0.68 million) and unadjusted profit of £1.47 million (H1 2019: £0.50 million)

Smart Zones adjusted operating profit(a) up 8.9% at £2.32 million (H1 2019: £2.13 million), with unadjusted profit £2.02 million (H1 2019: £1.95 million)

Smart Zones long term contract renewals with Charles Wells, Greene King, Hawthorne, Hydes, JW Lees and Punch

Smart Machines wins three significant contracts for a combined 20,000 units over 3-5 years


a)     Adjusted operating profit is profit before exceptional costs, amortisation, interest and share based payments

b)     H1 2019 Operational cash generation is pre LTIP taxation of £0.50m

c)     Net debt impacted by both the drawdown of a £2.0m term loan for the Vendman acquisition and strategic investments in the technology stack, annuity model and stock

Commenting on the interim results, James Dickson, Chairman of Vianet Group plc, said:

"Vianet's IOT platform investment and focus on growth areas is delivering an earnings breakthrough and I am pleased to report that this has resulted in an 11.1% increase in operating profit for the six months to 30 September 2019, compared to the same period last year. Encouragingly, on a like for like basis, this growth was closer to 20% as H1 2019 did not include employee performance related bonus provisions.    


The Group's strategy of delivering added value insight and analytics by connecting customers to their assets continues to drive sales. Smart Machines' connected devices and contactless payment services have continued to progress significantly, whilst Smart Zones' increase in revenue and profits was encouraging, despite the impact of pub disposals. Looking forward, the significant ongoing influx of capital, and the very recent Stampede report on UK pub numbers gives us further confidence that the industry is at last recovering.


We are confident that our significant investment in the Group's cloud based IOT platform and new data analytics and insight led capabilities will accelerate Vianet's growth plans and develop higher quality revenue streams from existing customers and other industry sectors.  


Underpinned by high levels of recurring revenue, underlying Group cash flow is strong and we have a solid financial platform to facilitate further expansion and development. The Board remains confident that Vianet's long term growth strategy is the right one and that the Group is very well positioned to deliver strong earnings growth and expand our future strategic options."

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