Trading Update

RNS Number : 4441Y

Vianet Group PLC

22 February 2013

 



Press Release

22 February 2013

Vianet Group plc

("Vianet" or "the Group")

Trading Update

Vianet Group plc (AIM:VNET), the leading provider of real time monitoring systems and data management services for the leisure, vending, and forecourt services sectors, announces that trading for the second half of the year to 31 March 2013 will be below the expectations of the Board. Against that background, the Group believes that operating profit before exceptional items and amortisation for the full year will be not less than £3.2 million as compared to £3.9 million for 2012.  Cash generation remains strong and the Board expects to maintain the final dividend at 4p, which would give a total dividend for the year of 5.7p.

A combination of increased investment in the US, delays to new contracts and pressure in the leisure sector has impacted performance.  

James Dickson, Chief Executive, commented:  "It is obviously disappointing to be downgrading expectations. We have made good progress in a number of areas but have not been able to offset the effect of contract delays.  The investment made in the US and recent contract wins in the UK means that the outlook for 2014 remains promising.  The actions taken to reduce costs, particularly in the Fuel Solutions business, are also now coming through and further cost reduction initiatives are being implemented across the Group.  It is against this backdrop and the continued strong cash generation that the Board expects to maintain the dividend."

Core Beer Monitoring

Following a strong period of trading in H1 and contract renewals with several high profile customers, the Group's core beer monitoring business traded less strongly in H2 due to delays to several anticipated iDraughtTM installation programmes and reduced contribution from traditional beer monitoring solutions as a result of bottom end pub disposals and the uncertainty that accompanies the disposal process. In addition, there have been less favourable rates at contract renewal as a result of customers transferring some non-core support services back in-house. Whilst there has been increased iDraught penetration and good progress in gaining new contracts to monitor gaming machines in the pub sector, this has not been enough to offset these issues. 

The Board remains confident that the outlook for further growth in the higher value iDraughtTM product and service, now accounting for almost fifteen per cent of the total installation base, remains very promising with many pub retailers conducting extensive evaluations. The Board does not expect significant further erosion in the number of the Group's installations, currently at approximately 18,000 sites.

Vending

The Vending Telemetry business is continuing to trade at breakeven in H2, although the expected benefits from a delayed significant order will not materialise until 2013/14 and commercial progress with Touch & Pay^TM cashless and contactless payment solutions, which were used successfully by Coca Cola and VISA at London 2012 Olympic Games, has been limited by delays in gaining extension approvals.

Fuel Solutions

The Group's Fuel Solutions Division continues to benefit from a reduced cost base and some new business gains. However, H2 is now expected to be loss-making having been held back by poor trading in December/January, and delays to two significant contracts which should now commence in March and April, respectively.  Despite this slow start, the business is expected to trade at breakeven in Q4 and the Board does anticipate a strong start to 2013/14.

iDraughtTM USA

As announced in the Interim Results in December, the Group has an exciting opportunity to accelerate investment in the USA and extend the Vianet Americas Inc. footprint beyond the Colorado on-premise beer market. 

Vianet Americas' roll out delivery capability has advanced significantly having established a high calibre USA team and formed a strategic alliance with Micro Matic USA for nationwide iDraughtTM installation, service and sales support.

Following several months of set-up activity, the full USA launch commenced in February with initial installations across ten states with several national USA retail chains, controlling over 2,000 bars. 

It is anticipated that a loss of £0.4 million will be recorded compared to the small profit originally expected with the Colorado-only business, reflecting the start-up costs of the enlarged opportunity.

Whilst the overall economic environment remains difficult, the future growth prospects across the Group's Leisure, Vending and Fuel Solutions businesses are encouraging and the Board continues to have confidence in the longer term growth of the Group. 

- Ends -

Enquiries:

Vianet Group plc
James Dickson, Chief Executive	Tel: [phone]
[e-mail]	www.vianetplc.com

Cenkos Securities plc
Stephen Keys / Camilla Hume	Tel: [phone]
	www.cenkos.com

Media enquiries:

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

About Vianet

Vianet Group is focused on the provision of real time monitoring systems and data management services for the UK's leisure and petrol forecourt 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 operates two divisions which comprise five key product groups:

LEISURE DIVISION

Beer Monitoring (BMS)	The Group's core product, BMS, is widely used by owners and operators within the UK licensed on-trade, especially the tenanted / leased pub sector. Flow meters connected to draught beer dispense lines send data via an on-site communication panel to a secure central database. Liquid volumes by fount, 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. BMS is installed in over 18,000 pubs and manages data for more than one in three UK pubs.
iDraughtTM	A more recent and rapidly growing product offer is iDraughtTM, an extension of the Group's BMS, 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. iDraughtTM 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. iDraughtTM 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.
Gaming  Machine Data Services	The acquisition of Coin Metrics in May 2007 was a strong strategic fit with Vianet's 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.
VendExpertTM Vending  Telemetry	The Group's subsidiary Vianet Limited is a pan-European provider of telemetry solutions and data applications to the vending industry. It provides services for all vending management needs; from operations, sales, field services, national accounts to senior management.

FUEL SOLUTIONS DIVISION

UK Petrol Forecourt Fuel Asset Management Services

Vianet Fuel Solutions ("VFS"), supplies key management information and associated services to independent, multi branded owner, and supermarket petrol forecourt operators to ensure they have total visibility and control of their end-to-end business via a single web-based solution. VFS offers the only one stop shop offering for end-to-end fuel asset management  products and services, which allow customers to maximise ROI from fuel stocks and assets which store, control and issue fuels. Our wet stock analysis provides key management information to independent, multi branded owner, and supermarket petrol forecourt operators helping them to reduce loss of fuel and improve profitability. VFS is the UK market leader in fuel pump calibration, adjustment and legal verification, and also a leading provider of forecourt audit and compliance services. Our proprietary web-based contract management solutions for forecourt operations have been designed to significantly simplify management of multiple contractors for both reactive and preventive maintenance, as well as ensuring regulatory compliance in a sector where exemplary control measures are essential. In addition, VFS offers forecourt engineering and project management solutions to a number of forecourt operators. VFS is the UK distributor for OPW Fuel Management System's tank gauging solutions and also performs tank relining, liquefied petroleum gas and small forecourt service works.

Headquartered in Stockton-on-Tees, Vianet employs more than 270 people. 

For further information, please visit www.vianetplc.com

 

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