Trading and COVID-19 Update and Notice of Results

RNS Number : 6348H

Vianet Group PLC

26 March 2020

 

Press release

26 March 2020

Vianet Group plc

("Vianet" or the "Group")

Trading and COVID-19 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 ("IOT") platform, today provides an update on progress and trading in respect to the situation regarding COVID-19.  The Group also notifies that, subject to FCA and or auditor guidance relating to COVID-19, it will release its results for the year ended 31 March 2020 on Tuesday, 2 June 2020.

The Group continues to implement detailed COVID-19 response plans, as the advice from Government evolves. Our aim remains to safeguard employee health and wellbeing, whilst continuing to support our customers and maintain the Group's robust financial position.

Trading for the second half of the year has been largely as anticipated and, as a result, subject to any further COVID-19 provisions, the Group's full year profits for the year ended 31 March 2020 will be in line with market expectations at over £4.00m and ahead of the £3.85m reported last year.

COVID-19 Commercial Impacts

The mandatory closures of pubs, bars and restaurants in the UK will have a material effect on almost all our Smart Zones customers.  In anticipation of this, we had therefore proposed a reduced rate on all our contracts in order to maintain business continuity and to avoid more expensive reconnection costs for customers when pubs reopen.  We are encouraged by our customers' responses and expect to be able to protect a meaningful portion of the Group's recurring revenue during this period of pub closures.

It is too early to predict the overall impact of COVID-19 on our Smart Machines business as we have seen mixed trading impacts across the range of our customers. Some vending machines, including those in hospitals, supply chains and emergency services are trading very well, whereas those in closed city centre offices have experienced little or no sales.  As with Smart Zones customers, we are providing impacted Smart Machines customers with the option of a reduced weekly charge in closed sites. Positively, we are seeing increased demand and usage of our contactless payment solution rather than 'dirty' coins.

Liquidity and Financial Resilience

In addition to the actions taken to protect a meaningful portion of our recurring revenues, the business has eliminated non-essential costs and spend, and is working hard to minimise supply chain exposure. The Group will take advantage of the full range of business support measures announced by the Government in recent days, including guaranteed loans, and in particular the Group is well advanced with the job retention scheme, where the government refunds 80% of salary for employees who are not working.

The Group has good liquidity with trade debts of approximately £2.2m, an overdraft facility of £1.5m which is 80% utilised ahead of customer receipts which are expected at the end of the month, and £1.8m in our deposit account.

Taking account of the Group's current cash and available resources, and modelling various prudent business scenarios, we are confident that the actions taken mean that the Group has a cash runway well beyond the period which the Government has indicated as being the likely duration of this crisis.  As such, the Board believes that the Group is well placed to absorb a prolonged period of uncertainty .  

Dividend

Despite the strong financial position of the Group, given the rising level of uncertainty as to how the COVID-19 situation will develop, alongside the other measures we are taking to preserve the cash position, the Board has decided to withdraw its recommendation to pay a final dividend at the forthcoming AGM, which would amount to approximately £1.16m.  The Board will review this decision again later in the year once the outlook becomes clearer.

The Board recognises that this is a significant decision, but believes that it is an appropriate and prudent measure to take at this point as the Group seeks to preserve its strong liquidity, cash flow, and financial position through these uncertain times.

Conclusion and Outlook

Ahead of the very recent impact of the COVID-19 restrictive measures introduced by the Government, momentum and performance of the Group had been encouraging across both divisions.

As seen during the past few weeks, the start to the new financial year will be challenging, however the Group is well equipped to weather this storm and emerge with even stronger customer relationships.

The Board's absolute focus is on ensuring that Vianet comes through this global crisis in a position to continue to take advantage of its exciting growth opportunities. In the meantime, the Board's priority is maintaining the health, wellbeing and safety of our employees and customers.

This announcement contains inside information.

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  Enquiries:

Vianet Group plc
James Dickson, Chairman Stewart Darling, CEO / Mark Foster, CFO	Tel: [phone] www.vianetplc.com
Cenkos Securities plc
Stephen Keys / Cameron MacRitchie	Tel: [phone]
	www.cenkos.com

Media enquiries:

Yellow Jersey PR
Sarah Hollins Henry Wilkinson  [e-mail]	Tel: [phone]   Tel: [phone] www.yellowjerseypr.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 also 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 practically 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 practically 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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