Vianet looks ahead with cautious confidence

Vianet Group, an AIM-listed company which provides real time monitoring systems and data management services for the leisure and forecourt services sectors, has said that it believes it is in a good position following a period of progress across all divisions.

In line with management expectations, during the six months ended September 30th revenue declined slightly from £11.79m to £11.19m, while pre-tax profit dropped from £1.62m to £1.26m.

The reduction to turnover was mainly attributed to the group's withdrawal from low margin, labour intensive beer volume recovery service activity for pub companies, and a reduction in lower margin activity in the Fuel Solutions division. It said that on a consolidated basis, recurring revenue across the group was approximately 70%, and almost 80% in the leisure business.

In an interview with Sharecast and Digital Look, the company's Chief Executive Officer, James Dickson, said that the board is "reasonably happy" with the performance and said the group is "moving in the right direction".

The group's Vending Solutions division consolidated its performance and said it was close to breakeven, despite delays to starting a major contract. The group has seen the development of new sales opportunities in the market.

Although turnover within the Fuel Solutions division was down 10% compared to the same period last year, it operated at a reduced loss level and a monthly profit was achieved in September and October 2012. Vianet expects this "solid progress" to continue into the second half.

The Leisure Solutions division, which Dickson said he is "really pleased" with, continued to generate strong operational cash flow with £3.2m in the six month period on the back of strong trading. It delivered 716 new installations during the half year.

The group is particularly excited about its recent investment in the US, and believes this provides "an excellent platform" to grow activities relating to the iDraught monitoring system. As part of this, it has formed an alliance with Micro Matic for the installation, service and sales support of iDraught technology.

Looking ahead, the company said that the economic environment remains challenging, the business remains robust: "Our tools help markets improve margins, so in challenging times demand increases."

It added: "Whilst the overall economic environment may remain constrained for some time, the board is confident that the medium to long term strategy is the appropriate one and that the group is capable of delivering consistent and sustained growth.

"The board expects this progress to result in further profitable growth and increased earnings over the full year to March 31st 2013 consistent with market expectations. Accordingly, the board also anticipates maintaining the current progressive dividend policy as the group continues to generate strong cash flows from its core beer monitoring business.

"The longer term outlook across the three principal divisions of the group (Leisure, Vending and Fuel Solutions) is very positive and capable of significant further development."

The group paid an interim dividend payment of 1.70p, up from 1.67p a year earlier.

The share price was unchanged by 15:30.

NR