Trading Update

RNS Number : 1202B

Brulines Group PLC

21 October 2009

 



Press Release

21 October 2009

Brulines Group plc

("Brulines" or "the Group")

Trading Update

Brulines Group plc (AIM:BRU), the market leading provider of real time monitoring systems and data management services for the UK leisure sector, provides the following trading update in advance of its interim results for the half year ended 30 September 2009 which will be announced on 1 December 2009.  

The Board is pleased to report that its interim results for the half year ended 30 September 2009 

are expected to be in line with management expectations. Trading in the Group's core beer monitoring business over the first half of the financial year has remained strong in an economic environment which continues to be challenging. The Board is encouraged by the commercial progress of i-draught quality monitoring and further headway has been made in significantly reducing the losses associated with the recent acquisitions of Vianet and Edensure.

Market Environment 

The impact on Group performance has been limited as the pub sector continues to demonstrate its resilience in a trading environment that has remained largely unchanged with ongoing socio economic pressures, the burden of beer duty and legislation as well as the continued uncertainty 

relating to the beer tie.  

Despite ongoing sector cost and capital pressures, the Group has been experiencing further demand for the Group's services, including volume recovery and i-draught and the pipeline of enquiries is encouraging.

Increased activity and traction with medium sized pub companies, regional brewers, hotels and the wider leisure sector is having a positive impact on the Group's customer base as  penetration is extended into the wider leisure market. 

Successful Integration of Subsidiaries and Business Development

Good progress has been made on the commercial development of i-draught TM, the Group's beer quality and EPOS variance monitoring product with new regional brewer contracts and commercial evaluation in the managed house sector.  

Despite a particularly tough consumer environment for pubs and bars in the US, the Group has been encouraged by the customer reaction to trials already carried out. The Board will continue 

to progress investment conservatively whilst increasing US presence to around 100 outlets within the Denver metropolitan area during the coming year.  

The Group has now integrated the Coin Metrics and Machine Insite customer offerings within its Leisure Division. Coin Metrics gaming machine remote monitoring business has now achieved break even on a monthly basis, whilst Machine Insite performance has remained broadly level with last year. 

The acquisition of Edensure, the intelligent forecourt solution provider, was completed at the end of October 2008. The business has secured ongoing activity with a leading supermarket earlier this calendar year which has taken Edensure close to break even on a monthly basis during the past six months. The Group is encouraged by the increased interest from major petrol forecourt operators and is pursuing opportunities to expand its footprint in the petrol forecourt market as part of the Group's strategy to provide cost-effective value added command and control solutions to all sectors of the forecourt industry.  

Vianet was acquired out of administration on 11 December 2008 and is now integrated with the Group's Leisure Division, where there are significant synergies in terms of technology, commercial proposition and customers. The focus in this period has been on revamping both the commercial organisation and customer proposition, whilst ensuring the unique solutions it provides are fit for purpose in addressing the significant market which is available.  

Vianet first half losses are materially lower than the Board anticipated as a result of increased device sales in the period however the Board does not expect this to be repeated to the same extent in the second half.  The sale of the M2M division to its management team in the period has facilitated the removal of significant management costs whilst retaining a ten percent interest.

Both Edensure and Vianet have leading globally scalable products and operate in markets with no dominant competitor. The Board is confident that there are opportunities to achieve market leadership in both these sectors and is exploring a number of potential complimentary 

acquisitions.   

Universe Group plc ("Universe")

As previously announced Brulines has made a preliminary approach to Universe Group plc relating to a potential offer for the issued and to be issued share capital of Universe.  Whilst agreement for Brulines to undertake due diligence has not yet been reached, the Board continues to seek a way to resolve this. Further announcements will be made as appropriate.

Outlook

The Group's strategic intent is to profitably extend its data handling penetration and footprint in the leisure, including vending, and petrol forecourt sectors where there is considerable overlap, 

and to achieve market leading positions using its core capabilities and products.  

The Group is performing well in challenging economic and trading conditions. As the Group's 

customers become increasingly focused on profitability and cash generation from their core operations, the Group's products will become more important to them than ever before.  

Despite the more difficult trading environment, future growth prospects are encouraging and 

management continue to view the future with confidence. The Board anticipates maintaining a progressive interim dividend from the Group's high level of cash generation in the first half of the year.

An analyst briefing to be given by James Dickson, Chief Executive, and Mark Foster, Finance Director, will be held at 9.30 am on Tuesday, 1 December 2009 at Abchurch Communications, 

16th Floor, 125 Old Broad Street, London, EC2N 1AR.  

- Ends -

  Enquiries:

Brulines Group plc James Dickson, Chief Executive
Mark Foster, Finance Director	Tel: [phone]
[e-mail]	www.brulines.com
Cenkos Securities plc Stephen Keys [e-mail]	Tel: [phone]

Media enquiries:

Abchurch
Sarah Hollins/ Joanne Shears / Mark Dixon	Tel: [phone]
[e-mail]	www.abchurch-group.com

About Brulines

Brulines Group is focused on the provision of real time monitoring systems and data management services for the UK's pub, leisure, gaming and petrol sectors.  Since its admission to AIM in 2006, the Group has grown both organically and through a series of strategic acquisitions to give the Group access to key vertical markets.  The Group has five core divisions:

Dispense Monitoring (DMS)	The Group's core product, DMS, is widely used by owners and operators within the UK licensed on-trade, especially the tenanted / leased pub sector. Intelligent Flow Meters ("IFM"), connected to draught beer dispense lines send data via an on-site communication panel to a secure central database. Liquid volumes by fount, spirit optic, draught wine or post mix are tracked as they are served, thereby helping customers to maximise sales, service and quality as well as managing their costs . DMS is installed in over 22,000 pubs and manages data for more than one in three UK pubs.
i-draught (formerly BQM)	A more recent and rapidly growing product offer is i-draughtTM, an extension of the Group's DMS, which scrutinises the quality of products running through beer lines in a bar; measuring volume, temperature, flow rate and liquid type (e.g. beer, cleaning fluid or water) at the point of dispense.  i-draught is an extension of the Group's DMS and is the first system to provide effective measurement of true yields on draught products. Actual dispense volumes are compared with till transactions to identify shrinkage from products given away, pilferage and wastage. i-draught measures the precise temperature of every pint as it is dispensed, the time taken to dispense each drink, and automatically identifies the liquid allowing customers to know exactly when lines are cleaned. Wherever they are customers can stay in control through accessing their information on a secure web site.
Leisure	The acquisition of Coin Metrics in May 2007 was a strong strategic fit with Brulines' existing Machine Insite business which already provides gaming machine data management and consultancy services to operators within the pub, club and leisure markets. Customers benefit from state-of-the-art real-time data capture and reporting systems that deliver improved machine profitability and operational security.
UK Petrol Forecourt Management	The Group's wholly-owned subsidiary, Edensure, supplies key management information to independent, multi branded owner, and supermarket petrol forecourt operators in the UK which helps reduce loss of fuel and improve profitability.  Edensure provides petrol retailers with an unrivalled level of accuracy in the monitoring and management of their wet stock, using the most sophisticated analytical techniques available worldwide.
Vending  Telemetry	The Group's subsidiary Vianet is a pan-European provider of telemetry solutions and data applications to the vending  industry.  Vianet provides services for all vending management needs; from operations, sales, field services, national accounts to senior management.

Headquartered in Stockton-on-Tees, Brulines employs more than 240 people. 

For further information, please visit www.brulines.com

 

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