TIDMVNET
RNS Number : 5600C
Vianet Group PLC
13 June 2023
13 June 2023
Vianet Group plc
("Vianet", "Company" or "the Group")
Final Results (unaudited)
A year of gathering momentum with strong prospects
Dividend reinstated
The following amendments have been made to the "Final Results
(unaudited)" announcement released on 13 June 2023 at 07:00 under
RNS No 4616C.
-- The Record Date for the dividend has been amended from
Thursday, 14 September 2023 to Friday, 15 September 2023
-- In the cash flow statement the net interest payable has been
amended from GBP230,000 to GBP206,000 and the repayments of
borrowings has been amended from GBP756,000 to GBP992,000
-- Note 6 to the accounts supporting the statement of cashflows
ahs been amended to reflect the above state changes.
All other details remain unchanged.
The full amended text is shown below.
------------------------------------------------------------------------------------------------
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
unaudited results for the year ended 31 March 2023 and a reinstated
proposed final dividend of 0.5p per share.
Financial highlights
-- Revenue increased 6.7% to GBP14.11m (FY2022: GBP13.22m);
-- Recurring revenues remained strong at 89% (FY2022: 88%) increasing by GBP1.19m to GBP12.56m;
-- Gross margin increased slightly to c. 66% (FY2022: c.65%);
-- Adjusted operating profit, pre-exceptional costs,
amortisation, and share-based payments of GBP3.11m, an increase of
31% (FY2022: GBP2.36m);
-- Profit before tax GBP0.45m (FY2022: GBP0.17m loss);
-- Basic earnings per share 0.56p (FY2022: 0.65p) net of
GBP0.29m tax charge vs FY2022 credit of GBP0.36m;
-- Net cash generation pre-working capital GBP4.45m (FY2022:
GBP2.74m), including accrued tax rebate of GBP0.92m;
-- Normalised profit to cash conversion was 102.8% of EBITDA; and
-- Dividend policy reinstated, with proposed final dividend of 0.5p per share.
Divisional & Operational highlights
-- The average recurring revenue per connected device grew to
GBP60.19 (2022: GBP54.02), 11.4% year on year growth;
-- Smart Machines adjusted operating profit increased 10.4% to
GBP2.01m (FY22: GBP1.82m), despite GBP0.45m of stock premium
costs;
-- Smart Machines added 11,062 new connected devices (FY22:
12,895) despite the vending sector distraction of planning related
to the UK-wide 3G switch-off;
-- SmartContact Pro all-in-one contactless and telemetry wins
vending industry award as best payment system and launch of
SmartVend in H1 2023 strengthens Smart Machines' offering;
-- Smart Zones revenue increased 4.2% to GBP8.16m (FY2022:
GBP7.83m) with operating profit up 26.7% to GBP3.79m (FY2022:
GBP2.99m);
-- Smart Zones' net installation base solid at 9,800 as ongoing investment and a pipeline of new installations offset a slowing rate of hospitality sector closures; and
-- Post year-end acquisition of trade and assets of US based
Beverage Metrics Inc (BMI) and receipt of HMRC tax refund of
GBP0.92m.
Commenting, James Dickson, Chairman of Vianet Group plc,
said:
" I am pleased to report that the proactive measures we
implemented over the past few years together with the dedication
and hard work of our staff have yielded excellent results.
The business has recovered strongly and is now performing in
line with pre-pandemic levels. During the year we focused on new
initiatives to ensure that customer relationships were maintained,
along with new connections delivering recurring revenue growth over
the period. Although pressures on global semi-conductor supply
chains and uncertainty from the conflict in Ukraine remain, we are
confident that our sales will continue to grow, moving towards
higher profits and wider markets.
Our focus over the last year has been on prudent cash
management, a further strengthening of our relations with customers
and strategic investment in sales and technology. These efforts now
place the Company on a sound footing and will enable us to scale
sustainable growth in both existing and new vertical markets.
The Smart Machines division reported 11,062 new connected
devices and is well placed to convert current and future
opportunities given our investment and the continued trend towards
non-cash transactions. Two significant recent contract wins and the
launch of SmartVend solution, expected in H1 2023, give us
confidence that the division will continue to grow strongly. Our
SmartContact Pro all-in-one again won best payment system, against
international competition, at the 2023 vending industry awards held
last week .
Smart Machines offers industry leading end-to-end product
suites, supporting growth prospects, with a clear line of sight
toward a doubling of the business by the end of FY25.
The Smart Zones division recovery continued with new contract
wins during the period. The launch of SmartDraught generated an
increased appetite from existing and prospective customers for the
inherent value of our market data. In collaboration with Oxford
Partnership, our offering guides decision-making and enhances
customer profitability, giving Vianet an exciting opportunity to
capture market share and grow revenue.
Both divisions are capitalising on new vertical opportunities
putting the Group on track to continue strong earnings growth. The
Board is confident that Vianet is well positioned to enter wider
markets. While the pandemic has thrown its challenges our way, we
feel that we have weathered the storm and are now pushing forward
and making up for lost time and the reinstatement of the dividend
is a reflection of our confidence in the future of the
business.
- Ends -
James Dickson, Chairman & CEO, and Mark Foster CFO will
provide a live presentation relating to financial results for the
year ended 31 March 2023 via the Investor Meet Company platform on
13th June 2023 at 10:30am GMT.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Vianet Group via:
https://www.investormeetcompany.com/vianet-group-plc/register-investor
Investors who already follow Vianet Group plc on the Investor
Meet Company platform will automatically be invited.
Enquiries:
Vianet Group plc
James Dickson, Chairman & Interim Tel: +44 (0) 1642 358
CEO 800
Mark Foster, CFO www.vianetplc.com
Cenkos Securities plc
Stephen Keys / Camilla Hume Tel: +44 (0) 20 7397
8900
www.cenkos.com
Investor enquiries:
Dale Bellis Tel: +44 (0) 20 7397
8900
CHAIRMAN'S STATEMENT
Introduction
I am delighted to report that the Group has continued to build
on positive commercial momentum in all areas through FY2023. This
positions us exceptionally well to capitalise on the exciting
growth opportunities, not only in the UK but in the USA and Europe
for FY2024 and beyond.
Global semiconductor supply chain pressures, high inflation
resulting from the Ukraine conflict and customers taking time to
develop strategic connectivity plans to address the mobile network
operators' ('MNO') 3G switch-off were issues that had to be
navigated in FY2023. However, the underlying trends remain strong,
and given the visibility we have, and the relationships we have
nurtured, we see FY2024 accelerating as it benefits from customer
estate upgrades to 4G LTE.
Encouragingly, sales grew c.7% to GBP14.1m (FY2022: GBP13.2m),
delivering an adjusted operating profit of GBP3.11m compared to
FY2022 GBP2.36m, representing c.31% year-on-year growth. We have
always had a rigorous drive to grow the top line and on maximising
the business' profitability which in return has enabled
reinstatement of dividend payments. All these are true testaments
to the team's hard work.
We were delighted to announce the acquisition of the trade and
assets of Beverage Metrics Inc. (BMI) post year-end. We have known
the BMI team for some years and believe that the comprehensive
inventory platform that they have developed will enhance our
existing draught beer management solution as well as directly
expanding our US footprint. Together with SmartDraught, these form
the most compelling beverage management solution available for
hospitality operators in the USA and UK.
In May 2020, a GBP3.5m Coronavirus Business Interruption Loan
(CBIL) was taken to support recovery and investment in technology
and commercial operations. Our strong operational cash generation
has permitted the relatively aggressive repayment of GBP0.7m per
annum plus interest, and the outstanding balance stands at GBP2.1m
at the end of May 2023.
Management is pleased to confirm that post year end we
successfully completed negotiation and due diligence with HSBC on
significantly improved finance facilities which are in the process
of completion and are due to commence in Q2 FY2024. Given how the
lending market has tightened during 2023, the fact that we have
negotiated an increased facility on improved terms shows the
financial strength of the business.
Dividend
The Group's FY2023 results, high levels of customer engagement,
and commercial momentum provide confidence that in FY2024, the
Group will benefit from solid revenue growth and high levels of
cash generation.
While semiconductor supply pressure is becoming less of a
concern there are still some uncertainties regarding prolonged
inflationary pressures. That said the Group remains committed to
achieving relatively aggressive repayment of loans. The new HSBC
facility will offer flexibility to support ongoing investment in
the business, particularly in relation to the exciting growth
opportunities, including Vianet Americas
The Board has always considered the paying of a dividend to
shareholders an important constituent of being a listed PLC, and,
notwithstanding the pressures alluded to above, is delighted to
announce our intention to reinstate our dividend policy. However,
the Board considers it prudent to prioritise the preservation of
the majority of cash for investment in growth, but recognising the
significance of dividends as an important component of total
shareholder returns, the Board proposes a FY23 dividend of 0.5p per
share payable on 27 October 2023 to shareholders on the register on
15 September 2023.
Board Changes and Staff
Following Chris Williams' retirement from the Board at the AGM,
Stella Panu was appointed as a Non-Executive Director and Chair of
the Audit Committee. Stella brings a wealth of financial expertise,
City experience, and a strong background in finance, strategy, and
M&A activity. Her valuable contributions have been extremely
helpful to the Board, and the Executive team, as we remain
committed to executing on our growth strategy.
The Board and I have also agreed that I shall remain as interim
CEO to ensure we continue to establish and maintain our strong
sales, and growth momentum. Having previously served as CEO, and
being a significant shareholder, I am committed to driving the
Company forward during this crucial time.
The Board regularly evaluates its composition and effectiveness
to ensure a balanced mix of experience and independence, supporting
the business and our growth ambitions. The operational structure of
the Group continues to evolve to address the growth opportunities,
and I am pleased to report further growth and development of the
management team, who continue to be highly motivated and focused on
delivery.
Our exceptional people consistently demonstrate enthusiasm,
commitment, and openness, underpinning the Group's excellent
reputation among customers, suppliers, and stakeholders.
I take great pride and am extremely grateful for the unwavering
commitment of our executive team, employees, and Board members in
continuing to drive the Group's progress.
Conclusion and Outlook
FY2023 brought about positive outcomes in increased sales,
profit, and cash generation. However, what really stands out is the
remarkable customer engagement and momentum generated by
introducing new solutions, partnerships, and commercial
initiatives. This is particularly encouraging for the Company's
future growth.
Our solutions empower customers to enhance their business
performance, fostering deeper stakeholder relationships and
creating substantial sales opportunities.
The Group is on track to deliver strong earnings growth across
our two divisions and maximise the opportunities in new verticals
for the financial year ending March 2024 and beyond.
Smart Machines leads the industry with its comprehensive product
suite, strengthened by new releases of our SmartVend solution and
the migration of existing customers to our exciting platform.
Vianet received accolades for Best Supplier Website and Best
Payment System at the vending industry awards, where our
SmartContact Pro all-in-one contactless payment and telemetry
solution prevailed over stiff international competition. With a
strong commercial team, long-term contracts with major blue-chip
customers, and a strong presence in the UK and European markets, we
have a robust pipeline of opportunities for telemetry and
contactless sales and data management.
-- The partnership between Vianet and Suresite Group Ltd has
bolstered our position in the fast-growing 'unattended' contactless
payments sector. By combining Vianet's cutting-edge contactless
payment hardware with Suresite's market-leading acquiring services,
we can now offer a competitive, user-friendly, and highly secure
payments solution that effectively future-proofs any unattended or
automated retail business. This solution caters to various
applications, from charging points and unmanned car washes to air
and vacuum stations.
-- In collaboration with Vendekin Technologies, the Group has
introduced an innovative mobile payment solution based on QR codes
offering customers a fast, secure, and convenient payment solution.
Through this partnership, we can expand our offerings and equip our
customers with the latest technology in the unattended retail
industry, to enhance the customer experience and help drive
growth.
-- Smart Zones has a pipeline of new site installations in
leased and tenanted pub companies. Integrating Vianet's draught
beer management solution with the recently acquired BMI inventory
platform offers customers a comprehensive drinks management
solution that enhances profitability by reducing costs, improving
productivity, and maximising sales. The integration also provides
brewers a cost-effective brand monitoring and market insight
solution. While the US operation may be initially loss-making in
FY2024, it's expected to approach breakeven position by the
year-end. More importantly, this acquisition should support
Vianet's growth in UK hospitality and be a step forward in
developing a profitable footprint in the USA.
-- Investing in our technology and commercial activity has
attracted strong interest from the environmental, catering,
forecourt, and tank monitoring sectors, with a breakthrough
expected in H1 FY2024.
-- The continued investment in our cloud infrastructure and
mobile technology will drive the development of existing revenues
in Smart Machines and Smart Zones. This investment will also enable
scalability, flexibility, and speed, which are crucial for
supporting rapid growth in both existing and new verticals.
-- The Group has consistently high contracted recurring income
and fully expects to generate strong operating cash flow.
The Board remains confident in the Group's long-term growth
strategy and ability to achieve earnings growth and expand future
strategic options. While cash management is a priority, the Board's
primary focus is on driving sales growth and seizing exciting
growth opportunities.
James Dickson
Chairman
13 June 2023
STRATEGIC REPORT
James Dickson
Chairman and Chief Executive
The year to March 2023 was a year of recovering growth and
re-establishing our market position. Having emerged from the
pandemic, we have successfully navigated the global semiconductor
chip supply problems and are progressing well in a high-inflation
economy.
Our core business provides connectivity to assets, enabling the
collection of operational data and the production of actionable
analytics and insights to help customers transform their business
performance. In a world increasingly reliant on Internet of Things
and AI we believe that we are at the forefront of our industry, not
only in providing solutions for today but developing tools for the
future.
With Vianet's leading-edge contactless payment capability
supporting customer sales growth from unattended retail machines,
the business is well placed to strengthen its position in this
rapidly developing area, with further contactless and data
opportunities on assets in marketplaces such as petrol
forecourts.
Our well invested cloud-based platform now supports much greater
flexibility of device connection and data connectivity to the
extent that it is possible to connect a range of business-critical
third-party devices, not just those we supply.
In collaboration with customers and partners such as Suresite
and Vendekin in unattended retail, we can identify compelling
end-to-end solutions to address business opportunities. This
combination of capabilities will enable us to drive sustained
business growth over the coming years.
Whilst FY2023 has had its global challenges, the Group has made
excellent progress executing key elements of our growth plan,
including securing new and renewed customer contracts over several
years, successfully launching SmartVend and our new market data
insights, and establishing 'strategic go to market' partnerships.
Via our contactless payment and telemetry solutions, we have
strengthened customer relationships and helped secure new business
in existing new verticals, such as retail, fuel forecourts and
industrial kitchens.
Post year-end, we acquired the trade and assets of BMI, which,
combined with our draught beer monitoring solution, establishes a
comprehensive beverage management platform. Whilst the combined US
operations will require initial investment during FY2024, the
acquisition has accelerated our hospitality-related development
roadmap enabling profitable expansion of our footprint in the USA
and UK beyond our legacy leased and tenanted customers.
OPERATING REVIEW
Smart Zones
The Smart Zones division recovery continued strongly. Revenues
rose by 4.2% at GBP8.16m (FY2022: GBP7.83m), with profit being up
26.7% at GBP3.79m (FY2022: GBP2.99m).
Sales improved to 259 (FY2022: 252) new site installations with
11 new contract wins, and 6 contract renewals as customers' needs
and demand for data and insights grew.
Our UK estate had 603 (FY2022: 535) pub closures and 259 new
installations, resulting in a net 344 site reduction (FY2022: 357),
taking our installed base to c 9,800. Whilst it is difficult to
predict the pace of closure rates and new openings, we believe this
is now a sustainable leased and tenanted level.
The post year end trade and asset acquisition from BMI will
accelerate our penetration of the UK hospitality sector beyond our
current leased and tenanted footprint.
Building on the customer engagement of the last two years and
the launch of SmartDraught and our insights portal, we see an
increased appetite for market data insights. This is particularly
relevant for the provision of retail data for brewer s. Through our
relationship with the Oxford Partnership, we deliver
ground-breaking insights that support consumer-level
decision-making for beer brands. We expect to show further growth
in this exciting area in FY2024.
Adding our compliance service and data insight analytics to the
BMI assets will result in a heightened emphasis on improving
operational and retail performance. This strategic approach aims to
drive value from pubs, especially those under private equity
ownership, by maximising their return potential.
Vianet Americas Inc ("VAI")
VAI saw losses increase to GBP150k for FY2023 (Fy2022: GBP127k
loss), impacted by the pandemic related loss of over 250 units with
AMC Theatres.
The acquisition from BMI included customers, an established
inventory operating platform, software IP, patents for barcode 3D
scanning and advanced technology for point-of-sale data
integration.
The combination of Vianet's SmartDraught draught beer management
solution with BMI's inventory platform provides a comprehensive
one-stop drinks management solution which enables operators to
reduce costs, improve productivity and maximise sales, and drive
improved profitability across the entire drinks category.
SmartDraught integration with the inventory platform will also
enable Vianet to provide brewers with a more cost-effective and
competitive brand monitoring and market insight solution.
Together with our recent investment in SmartDraught, this
acquisition positions Vianet's hospitality operations firmly on the
path to growth in the UK and to establishing a profitable footprint
in the USA, where we benefit from direct access to a significant
number of national retail chains.
The opportunity for the Company in the US, the world's largest
single-operator market, remains significant. While the combined US
operations will require investment and is expected to be
loss-making during FY2024, we anticipate monthly loss to have
narrowed significantly by year-end and remain committed to
establishing a significant US profit centre.
Overall, the Board remains confident that the Smart Zones
division will see growth and deliver enhanced turnover, profit, and
cash returns to the Group.
Smart Machines
Our investment in sales and marketing, including a new CRM
system, resulted in solid business gains, including 75 new customer
contract wins, which provides a healthy pipeline to underpin our
growth plans.
Turnover was up 10.5% at GBP5.95m (FY2022: GBP5.38m), with
operating profit up 10.4% at GBP2.01m (FY2022: GBP1.82m).
The number of connected devices was 11,062 (FY2022: 12,895).
Post machine rationalisation, the total connected devices grew
11.6% to 53,800 at the year-end (FY2022: 48,000).
The division made good progress despite short-term challenges,
namely:
-- Global semiconductor component supply pressure, whilst easing
during the FY2023, added GBP0.45m to our component costs, impacted
component supply chains and slowed down our customers' introduction
of new vending machines.
-- The continued uncertainty around the pace of office
re-openings and changing working habits regarding remote working
has made it challenging for vending operators to determine new site
economics.
-- The MNO 3G sunset, or switch-off, is a short-term distraction
to vending operators developing plans to upgrade machines from 3G
to 4G LTE. Whilst this has dampened short-term demand, Vianet has
developed the Vianet Assist hardware support package, which will
result in upgrade activity and footprint expansion.
The division's recurring revenues grew 16.5% YOY by GBP0.63m and
now represent 80% of turnover (FY2022: 77%).
As has been widely reported in the press, the trend toward
non-cash transactions is growing significantly, with contactless
payments giving a fast, easy, and secure transaction in a world
where fewer people carry cash. Contactless payment solutions drive
increased machine utilisation and sales for our customers, who
benefit from the reduced cost of cash handling, improved cash flow
and assured payment.
We believe that there is a significant opportunity to drive
growth in the unattended retail market by delivering market-leading
analytics and insight into premium coffee and unattended retail
snack & can channels from new device connections and the
rollout of contactless payment capability, as well as other market
verticals such as fuel forecourts.
The market opportunity for the Group is significant even when
limited to the immediately addressable market of over 300,000
vending machines in the UK. It is estimated that the wider
addressable market in mainland Europe is nearer 3 million devices,
and there are 15 million machines worldwide, of which only c.30%
have any form of connectivity.
Our contactless payment solution is supported by leading
industry partners Elavon, Worldpay and NMI and is enhanced by
establishing our PCI Master Merchant service. This allows us to
speed up the onboarding of customers for payment capability and
provide a more cost-effective reconciliation and payment service to
our customers.
Contactless payment remains a desirable solution in a market
where traditional cash-only payments have long inhibited
vending-related usage, consumption, and customer experience. We
believe the evolution and growth of contactless payment solutions,
QR code technology and the insight from our telemetry firmware will
materially change this dynamic and attract more consumers to the
vending vertical.
In summary, the growth prospects for our Smart Machines business
are positive, and there is a clear line of sight toward a doubling
of the business by the end of FY2025.
R&D Investment
R&D investment is vital to maintaining the Group's market
position and thus we have continued to invest in delivering our
product roadmap and operational capabilities.
-- SmartVend vending management software service module released
in Q3 FY2023 with a finance module due for release in Q1 FY2024.
Customer migrations should be complete by spring 2024.
-- SmartDraught hardware and software development, partially in
collaboration with BMI, has resulted in enhanced features and
reduced the cost of both hardware and support.
-- SmartInsight market insight portal developed and launched.
-- Speed and latency of our solutions has improved with
incremental hardware development to adapt existing technology for
new verticals.
Further product enhancements, migration of all customers to
SmartVend, integration of BMI, and securing new market verticals
for telemetry and contactless payments on a cloud-based platform
will further boost our services to customers in existing and new
verticals.
The Board believes the investment in data capture technology,
our core data management capability, and management software
platforms will continue to deliver growth and enhance the quality
and visibility of our recurring revenue streams.
LOOKING FORWARD
-- Vianet has excellent momentum to take advantage of
opportunities in remote asset management, contactless payment, and
market data insights both in our core and new markets, whilst the
recent BMI acquisition will enable growth in our hospitality
operations. The launch of the SmartVend management platform in H2
2023 has been well received and will generate further operational
efficiencies for our customers with complex migrations expected to
complete in Q4 2024. This will further cement Smart Machines as the
marketplace's leading end-to-end solution. Our highly motivated
sales and commercial team in Smart Machines are continuing to
accelerate growth from the significant pipeline of opportunities
from existing and new customers in the c 3 million machine UK and
Europe vending machine market. New business gains resulted in 75
customers being onboarded, helping us deliver significant new
device sales.
-- Smart Zones has a healthy sales pipeline in its core UK
leased and tenanted sector driven primarily by our data
capabilities. We expect new system sales in FY2024 to more than
offset further pub closures. The combination of BMI's inventory
platform and Vianet's draught beer monitoring creates a
comprehensive and affordable beverage management solution which
will also unlock opportunities for stock management, enhanced
analytics, and insight, which will result in growth across all UK
pub sectors and the USA. Continued Private Equity pub company
ownership is expected to drive greater focus on operating and
retail performance, where we are well placed to deliver value for
customers.
-- Growing demand for connectivity solutions, data capture,
insights, and payment systems are driving new sales in our core
hospitality and unattended retail sectors. The recent announcement
of our partnership with Suresite, a leading forecourt retail
specialist, and Vendekin QR payment specialists, demonstrates our
progress toward leveraging our existing technology to extend our
growth in other sectors such as catering and forecourt solutions
where we anticipate good growth.
Whilst we are not immune from the global supply chain challenges
or the economic backdrop, increasing demand for our highly relevant
products will continue to drive growth, high-quality recurring
income, and cash generation. Ongoing investment in product
development and people is creating real momentum. The Group is
confident that the team, products, and financial capabilities we
have will continue delivering growth of the business.
The Board remains confident that momentum and sales will
continue to build as we execute our long-term strategy and deliver
sustainable earnings growth and profitability.
Finally, our high-calibre, energised team, robust strategy, and
strong earnings visibility provides a natural platform for growth
as we expand our IoT capability and deliver data and insight
applications that help our customers make better decisions about
their assets, to transform business performance.
FINANCIAL REVIEW
Mark Foster
Chief Financial Officer
FINANCIAL PERFORMANCE
Group operating profit, pre-exceptional costs, amortisation and
share based payments was GBP3.11m (FY2022: GBP2.36m), being c77% of
pre-pandemic performance, a strong momentum-based recovery in the
last two years from the loss of FY2021 being the core pandemic
year. It is important to recognise we have been impacted by
cGBP450k of stock premium costs in the year, without which our
operating profit would have been cGBP3.56m, versus a like for like
last year of GBP2.59m allowing for cGBP230k of stock premium costs
in FY2022 - GBP0.96m growth, c37%.
Despite some stock premium cost headwinds absorbed in the year,
proactive management delivered robust gross margins at c. 66%
(FY2022: 65%) reflecting the strength of the margin enhancing
growing recurring revenue footprint.
TURNOVER
Turnover improved 6.8% by GBP0.9m to GBP14.11m (FY2022:
GBP13.22m), with Smart Machines continuing its growth curve and
best result to date, in addition to Smart Zones continued strong
recovery with growing revenue and profit.
RECURRING REVENUE
Group contracted recurring revenue base remains very robust and
has been strengthened by several new 3-5-year contracts, both from
new customers and contract renewals.
Consolidated recurring revenue across the two divisions remained
robust at 89% (FY2022: 88%), despite new sales being more capex
based, but demonstrating the strength of a growing recurring
revenue footprint. Overall actual recurring revenue grew 12% by
GBP1.19m year on year, and it is set to continue.
The average recurring revenue per connected device grew to
GBP60.19 (FY2022: GBP54.02), 11.4% year on year growth.
PERFORMANCE SUMMARY
Profit before tax was GBP0.45m (FY2022: GBP0.17m loss), being a
material improvement from the low of FY2021 pandemic year. We took
the opportunity to seek a tax refund, which was received post year
end, for accrued R&D losses which has impacted the tax position
in the year, which shows a tax charge of GBP291k after all tax
movements. The table below shows the performance of the Group.
FY2023 FY2022 Change
Revenue GBP14.11m GBP13.22m 6.7%
Operating
profit(a) GBP3.11m GBP2.36m 31.4%
Profit/(loss) GBP0.45m (GBP0.17m)
before
tax
Basic EPS 0.56p 0.65p
Dividend
per share 0.5p 0.0p
Net debt GBP3.37m GBP3.00m 11.0%
a) Pre-exceptional items, share based payments and amortisation.
EXCEPTIONALS
Exceptional items of GBP122k was flat year of year (FY2022:
GBP121k) largely comprised of corporate activity costs of
GBP103k.
DIVID
As noted in the Chairman's statement, the Board has proposed
re-instating a dividend policy with a payment of 0.5p per share
(FY22: nil).
CASH / FINANCING
Net cash generation pre-working capital movements was an inflow
of GBP4.45m (2022: GBP2.74m which includes an accrued tax rebate of
cGBP0.92m. Normalised cash generation was GBP3.53m, 113.6% of
EBITA, and 102.8% of EBITDA - back at the healthy levels of profit
to cash conversion we were used to seeing pre-pandemic.
Working capital was closely managed, noting the impact of
semiconductor supply and stock premium costs together with
inflationary pressures, which delivered a post working capital
generation inflow of GBP2.04m (2022: GBP2.40m).Excluding the one
off effect of the accrued tax refund of GBP0.92m, the underlying
operational working capital drawdown was GBP1.49m (FY2022:
GBP0.34m) which was significantly impacted by stock investment to
manage the global semiconductor supply challenge and ensure we had
stock on the shelf to service customers, together with increased
trade debts from improving trade, and higher credit outflows
funding that stock and increased VAT. Q4 of H2 FY2023 has seen that
stock investment start to unwind which should continue in
FY2024.
The cash generated was principally used to invest in R&D
technology spend (as noted in the Chairmans and Strategic review),
new recurring revenue rental assets, some delayed vehicle fleet
refreshment, and servicing existing Lloyds bank debts, the CBIL,
and mortgage obligations in the main, and overdraft interest costs.
This resulted in an overall cash outflow of GBP1.37m (2022:
GBP1.63m).
Post year end, we concluded negotiations and due diligence with
HSBC on significantly improved finance facilities that materially
reduces debt repayment requirements with a blend of RCF, new
mortgage and term loan, allowing more of the cash generated to be
invested in our products and services, and if we so choose, debt
repayment, and dividend yield. The HSBC facility contracts are
expected to complete by the end of June ahead of our audited Report
& Accounts and Notice of AGM being released in July. In the
interim whilst the Group finalises the new facilities with HSBC,
which include migrating our mainstream banking, our existing bank
Lloyds can extend to September 2023 or beyond.
At the year end, noting the stock premium costs incurred in the
year of cGBP450k, pre-mortgage, CBIL and previous acquisition
loans, the Group had gross cash of GBP0.07m (2022: GBP1.57m) and
net debt of GBP3.37m (2022: GBP3.00m) - a solid position given
those premium costs, and a funded growth plan that should deliver
an improved cash generation bottom line.
The strong recovery over the last two years positions us well
for FY2024 and beyond. We have incurred c GBP0.7m of stock premium
costs in the last two financial years, but despite this, delivered
growing cash generation to meet the needs of the business. This
together with the planned improved bank facilities and the expected
business plans we have developed over three indicative years, we
believe we have solid cash runway forecasts well into 2024 and
beyond, which will underpin our business strategy and allow for our
growth plans.
DIVISIONAL PERFORMANCE
Currently the Smart Zones division principally consists of the
core beer monitoring and insight business services (including the
US).
SMART ZONES
FY2023 FY2022
Turnover GBP8.16m GBP7.83m
Operating GBP3.79m GBP2.99m
profit(a)
Profit/(loss) GBP2.97m GBP2.23m
before
tax
Connected
devices 154,216 166,804
New site
installations 259 252
YE Net c. 9,800 c. 10,100
premises(b)
iDraught
penetration(b) 28.9% 30.2%
a) Pre-exceptional items, share based payments and amortisation.
b) UK, USA, and Europe
Recurring revenue of 95% (FY2022: 96%) with recurring revenue
per device up 12.2% to GBP50.35 (FY22: GBP44.89).
Average adjusted operating profit per device in the year grew to
GBP24.57 (2022: GBP17.93), up 37.0% reflecting a year of full
billing.
The division has recovered well and ahead of what was expected
at the outset of the year demonstrating both the customer
engagement for the services we provided and the resilience of the
revenue model. The net estate at the year-end was circa 9,800 sites
(UK & Europe) versus last year's c. 10,100 (excluding USA), the
reduction stemming from disposals and C19 impact.
Despite this, we were able to increase Smart Zones operating
profit to GBP3.79m (FY2022: GBP2.99m), which was 65.4% of
pre-pandemic performance.
SMART MACHINES
The Smart Machines division consists of telemetry insights and
monitoring, and contactless payment predominantly in the unattended
vending retail and coffee sector, as well as ERP and mobile
connectivity services.
FY2023 FY2022
Turnover GBP5.95m GBP5.38m
Operating GBP2.01m GBP1.82m
profit
(a)
Profit GBP1.65m GBP1.59m
before
tax (b)
New Telemetry
connections 2046 2,275
New Contactless
connections 9,016 10,620
YE Net
estate 53,758 48,179
a) Pre-exceptional items, share based payments and amortisation on a continuing basis.
b) FY2023 includes GBPnil of deferred consideration release (FY2022: GBP0.76m)
Recurring revenues were c80% of turnover (FY2022: c77%)
reflecting the increasing recurring revenue footprint despite more
capex sales this year. Recurring revenue grew cGBP630k year on
year, c16.5%.
Semiconductor component global supply, and some change in
working habits regarding remote working did impact the pace of new
connected devices, but despite that, new contactless connections in
our Smart Machines division continued to be achieved with 9,016 new
contactless devices compared to 10,620 last year. The estate
figures in the table above reflect the net movement which also
includes some customers rationalising their estates in light of the
new normal office working.
Average recurring revenue per device grew 3.33% to GBP88.42
(FY2022: GBP85.57), reflecting the increased footprint and is
despite most sales in the year being capex based, and some customer
estate refinement which would impact recurring revenue overall
levels. As stated previously, this is an evolving growth story,
with overall turnover and profit growth trends being driven by
increased penetration of our contactless and telemetry solutions
and so these measures will flex each year.
Profit per device is on a par with last year GBP37.45 (FY2022:
GBP37.75), reflecting the impact of the stock premiums incurred
during the year of around GBP450k compared to last year-round
GBP230k. Without that impact, the year-on-year profit per device
would have been nearer GBP41.54, growth of cGBP3.81, 10.0%. Indeed,
the overall profit of GBP2.01m was held back by the stock premium
costs, without which results would have been cGBP2.46m,
representing a like for like growth of c20.1%.
Taxation
The Group has continued to utilise available tax losses during
the year resulting in no tax being paid (FY2022, GBPnil). The Group
will continue to utilise the available tax losses carried forward
into FY2024, but we did elect to receive a refund of R&D tax
losses for FY2021 and FY2022 amounting to cGBP922k, which was
received post balance sheet. The impact of this on the brought
forward tax losses and deferred tax position contributed to an
overall tax charge of GBP0.29m (FY2022 tax credit GBP0.36m)
recognising the impact of the tax losses available and being
utilised.
Earnings per share
Basic EPS was 0.56p (FY2022: 0.65p). This reflects the step
forward in results but impacted by the tax charge this year
compared to the tax credit last year.
Balance sheet and cash flow
The Group balance sheet remains strong, very capable of
supporting our growth position and is further enhanced post balance
sheet by a more flexible HSBC bank facility which will in essence
remove the aggressive CBIL repayment terms and term.
The Group generated operating cash flow pre working capital of
GBP3.53m (FY2022: GBP2.74m) being 28.8% growth year on year.
Post working capital covered above, there was a net inflow of
GBP2.04m (FY2022: GBP2.398m) impacted by GBP0.45m of stock premium
costs (FY2022: GBP0.23m).
The cash generated was used to continue to invest in the Group's
technology plans to service borrowings and acquire rental assets,
alongside some delayed vehicle fleet refreshment.
At the year-end, the Group had borrowings of GBP3.44m (FY2022:
GBP4.58m), including the CBIL facility and overdraft, with net debt
of GBP3.37m (FY2022: GBP3.00m).
Our resilient balance sheet and capacity to generate cash
provides the Company with a solid base to build on the results of
FY2023 results to pursue the significant growth opportunities that
have been identified.
Business risk
The Board and senior management review business risk two to
three times per year. Naturally, over the last two years C19 has
had its well documented impact. The last year has seen increased
stock premium costs and an increased inflationary environment. The
Directors had considered the areas of potential risk in assessing
the Group's prospects. Based on their review, and having considered
various factors such as market conditions, stock supply and premium
costs, inflation, financial plans and approved new bank facilities,
they believe that the business is of sound financial footing and
has a forward looking sustainable operating future. They note that
the business has achieved a good recovery financially in the year
despite noting some of the hurdles they have faced, set against
overall market confidence in liquidity and credit.
The Directors consider that material business risks are limited
to:
-- Inflation remaining for a long-term period and a return of significant stock premium costs.
-- The potential for a cyber security breach where data security
is compromised resulting in unauthorised access to information
which is sensitive and/or proprietary to Vianet or its customers.
This threat is in common with most technology businesses, however
both short term and long-term mitigation plans continue to be in
place. Payment Card Industry Data Security Standard (PCI DSS -
Level 1) highest level of compliance has already been achieved to
support the Group's contactless payment solutions and by May 2022
all on premise servers are in the cloud.
Key performance indicators
Actual Actual
Target 2023 2022
------- ------- -------
Percentage
of revenue
from recurring
income streams
(1) 80% 88% 88%
------- ------- -------
Gross Margin
(2) 70% 66% 64%
------- ------- -------
Employee Turnover
(3) 2% 3.8% 3.5%
------- ------- -------
Notes to KPIs
(1) Percentage of revenue from recurring income streams =
recurring income streams as a percentage of all income streams.
Group trading companies aim to increase shareholder value through
growth in revenue, linked to profitability (see Gross Margin
below). Source data is taken from management information. The
recurring contractual nature of the Company's income stream has led
to continued improvement in performance versus target. The
achievement of this target depends on the mix of new hardware sales
versus on going recurring revenue.
(2) Gross Margin = Gross profit as a percentage of revenue.
Group trading companies aim to generate sufficient profit for both
distribution to shareholders and re-investment in the Company, as
measured by Gross Margin.
(3) Employee Turnover = Gross trading companies aim to be seen
as a good, attractive employer with positive values and career
prospects, measured against internal People and Development
reports. In addition to normal employee turnover, the figure also
includes employees leaving because of business rationalisation
activity.
Consolidated Statement of Comprehensive Income for the year
ended 31 March 2023
Before Before
Exceptional Exceptional Total Exceptional Exceptional Total
2023 2023 2023 2022 2022 2022
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Note
Continuing
operations
Revenue 14,115 - 14,115 13,215 - 13,215
Cost of
sales (4,737) - (4,737) (4,654) - (4,654)
Gross profit 9,378 - 9,378 8,561 - 8,561
Administration
and other
operating
expenses (6,273) (122) (6,395) (6,198) (121) (6,319)
Operating
profit
pre amortisation
and share
based payments 3,105 (122) 2,983 2,363 (121) 2,242
Intangible
asset
amortisation (2,254) - (2,254) (2,195) - (2,195)
Share based
payments (71) - (71) (83) - (83)
------------------- ----- ------------------ -------------- ---------- -------------- -------------- ----------
Total
administrative
expenses (8,598) (122) (8,720) (8,476) (121) (8,597)
Operating
profit/(loss) 780 (122) 658 86 (121) (36)
------------------- ----- ------------------ -------------- ---------- -------------- -------------- ----------
Net finance
costs (206) - (206) (138) - (138)
Profit/(loss)
before
tax 574 (122) 452 (53) (121) (174)
Income
tax
(charge)/credit 1 (291) - (291) 361 - 361
Profit/(loss)
and other
comprehensive
income
for the
year 283 (122) 161 308 (121) 187
Earnings
per share
Total
- Basic 3 0.56p 0.65p
- Diluted 3 0.56p 0.63p
------------------- ----- ------------------ -------------- ---------- -------------- -------------- ----------
Consolidated Balance Sheet at 31 March 2023
2023 2022
GBP000 GBP000
Assets
Non-current assets
Goodwill 17,856 17,856
Other intangible assets 5,425 5,976
Property, plant and equipment 3,370 3,262
Deferred tax asset - 386
Total non-current assets 26,651 27,480
---------------------------------- -------- --------
Current assets
Inventories 2,275 1,573
Trade and other receivables 3,781 2,690
Cash and cash equivalents 69 1,583
---------------------------------- -------- --------
6,125 5,846
------------------------------- -------- --------
Total assets 32,776 33,326
---------------------------------- -------- --------
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables 2,348 2,983
Leases 70 25
Borrowings 1,925 2,310
4,343 5,318
Non-current liabilities
Leases 122 -
Borrowings 1,517 2,273
Deferred tax liability 827 -
2,466 2,273
------------------------------- -------- --------
Equity attributable to owners
of the parent
Share capital 2,880 2,880
Share premium account 11,711 11,711
Capital redemption reserve 15 15
Share based payment reserve 563 499
Merger reserve 310 310
Retained profit 10,488 10,320
---------------------------------- -------- --------
Total equity 25,967 25,735
---------------------------------- -------- --------
Total equity and liabilities 32,776 33,326
---------------------------------- -------- --------
Consolidated Statement of Changes in Equity for the year ended
31 March 2023
Share
Share based Merger Capital
Share premium payment reserve Redemption Retained
capital account reserve Reserve profit Total
At 1 April 2021 2,895 11,709 437 310 - 10,238 25,589
-------- -------- -------- --------- ------------ -------- ------
Issue of shares - 2 - - - - 2
Cancellation of shares (15) - - - 15 (126) (126)
Share based payments - - 83 - - - 83
Share option forfeitures - - (21) - - 21 -
Transactions with
owners (15) 2 62 - 15 (105) (41)
-------------------------- -------- -------- -------- --------- ------------ -------- ------
Profit and total
comprehensive income
for the year - - - - 187 187
-------------------------- -------- -------- -------- --------- ------------ -------- ------
Total comprehensive
income less owners
transactions (15) 2 62 - 15 82 146
--------------------------
At 31 March 2022 2,880 11,711 499 310 15 10,320 25,735
-------------------------- -------- -------- -------- --------- ------------ -------- ------
At 1 April 2022 2,880 11,711 499 310 15 10,320 25,735
-------- -------- -------- --------- ------------ -------- ------
Share based payments - - 71 - - - 71
Share option forfeitures - - (7) - - 7 -
Transactions with
owners - - 64 - - 7 71
-------------------------- -------- -------- -------- --------- ------------ -------- ------
Profit and total
comprehensive income
for the year - - - - 161 161
-------------------------- -------- -------- -------- --------- ------------ -------- ------
Total comprehensive
income less owners
transactions - - 64 - - 168 232
--------------------------
At 31 March 2023 2,880 11,711 563 310 15 10,488 25,967
-------------------------- -------- -------- -------- --------- ------------ -------- ------
Consolidated Cash Flow Statement for the year ended 31 March
2023
2023 2022
Note GBP000 GBP000
Cash flows from operating activities
Profit for the year 161 187
Adjustments for
Net interest payable 206 138
Income tax charge/(credit) 291 (361)
Amortisation of intangible assets 2,254 2,195
Depreciation 519 489
Contingent consideration release - (76)
Loss on impairment of property,
plant and equipment and businesses 24 83
Tax receivable 922 -
Share based payments 71 83
Operating cash flows before changes
in working capital and provisions 4,448 2,738
Change in inventories (702) (142)
Change in receivables (1,091) 68
Change in payables (618) (267)
(2,411) (341)
Cash generated from operations 2,037 2,397
Net cash generated from operating
activities 2,037 2,397
--------------------------------------------------- -------- --------
Cash flows from investing activities
Purchases of property, plant and
equipment (651) (465)
Capitalisation of development costs (1,699) (1,975)
Purchases of intangible assets (4) (12)
Proceeds from disposal of property,
plant and equipment - 22
Net cash used in investing activities (2,354) (2,430)
--------------------------------------------------- -------- --------
Cash flows from financing activities
Net interest payable (206) (138)
Repayment of leases (65) (28)
Issue of share capital - 2
New leases 231 -
Cancellation of shares - (126)
Payment of contingent consideration (16) (16)
Repayments of borrowings (992) (1,289)
Net cash used in financing activities (1,048) (1,595)
--------------------------------------------------- -------- --------
Net decrease in cash and cash equivalents (1,365) (1,628)
Cash and cash equivalents at beginning
of year 266 1,894
--------------------------------------------------- -------- --------
Cash and cash equivalents at end
of year (1,099) 266
--------------------------------------------------- -------- --------
Cash balance as per consolidated
balance sheet 69 1,583
Bank overdrafts (1,168) (1,317)
-------------------------------------- -------- --------
Balance per statement of cash flows (1,099) 266
-------------------------------------- -------- --------
Notes to the financial statements
1. Taxation
Analysis of tax charge/(credit) in year
2023 2022
GBP000 GBP000
Current tax credit
- Amounts in respect of the current year - -
- Amounts in respect of prior periods (922) -
(922) -
Deferred tax charge/(credit):
- Amounts in respect of the prior year 1,262 -
- Amounts in respect of the current year (49) (390)
- Amendment re-recognition of losses - 29
Income tax charge/(credit) 291 (361)
------------------------------------------ -------- --------
Reconciliation of effective tax rate
The tax for the 2023 year is higher (2022: was lower) than the
standard rate of corporation tax in the UK (2023: 19% and 2022:
19%). The differences are explained below:
2023 2022
GBP000 GBP000
Profit/(loss) before taxation
- Continuing operations 452 (174)
Profit/(loss) before taxation multiplied
by rate of corporation tax in the UK of
19% (2022: 19%) 86 (33)
Effects of:
Other expenses not deductible for tax purposes (17) (20)
Non-taxable income (44) (33)
Losses not provided for 567 129
Adjustments for prior years (922) 29
Amortisation of intangible assets 427 -
Research and development 194 (488)
Other differences - 55
Total tax charge/(credit) 291 (361)
------------------------------------------------ -------- --------
2. Ordinary dividends
2023 2022
GBP000 GBP000
Final dividend for the year ended 31 March
2023 of nil (year ended 31 March 2022: nil) - -
Interim dividend paid in respect of the - -
year of nil (2022: nil)
Amounts recognised as distributions to equity - -
holders
---------------------------------------------- -------- --------
In addition, the directors are proposing a final dividend in
respect of the year ended 31 March 2023. Total dividend payable
0.005p (2022: nil).
3. Earnings per share
Earnings per share for the year ended 31 March 2023 was 0.56p
(2022: 0.65p).
Basic earnings per share are calculated by dividing the earnings
attributable to ordinary shareholders being a profit of GBP161k
(2022: GBP187k) by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share are calculated on the basis of profit
for the year after tax divided by the weighted average number of
shares in issue in the year plus the weighted average number of
shares which would be issued if all the options granted were
exercised.
2023 2022
Earnings Basic Diluted Earnings Basic Diluted
GBP000 earnings earnings GBP000 earnings earnings
per share per share per share per share
Post-tax profit attributable
to equity shareholders 161 0.56p 0.56p 187 0.65p 0.63p
2023 2022
Number Number
Weighted average number of ordinary shares 28,808,914 28,949,491
Dilutive effect of share options 66,673 380,517
------------------------------------------------------------------------ ------------------- -------------
Diluted weighted average number of ordinary
shares 28,875,587 29,330,008
------------------------------------------------------------------------ ------------------- -------------
4. Exceptional items
2023 2022
GBP000 GBP000
Corporate activity and acquisition costs 103 127
Corporate restructuring and transitional
costs 17 61
Contingent consideration release - (76)
Network obsolesce costs - 5
Other 2 4
122 121
------------------------------------------ -------- --------
Corporate activity and acquisition costs relate to fees paid to
corporate advisors in respect of prospective acquisitions and
corporate evaluations.
Corporate restructuring and transitional costs relate to the
transition of people and management to ensure we have to succession
and calibre of people on board to deliver the strategic aims and
aspirations of the Group.
The contingent consideration release in the prior year referred
to the acquisition of Lookoutsolutions Limited in 2011. The balance
was fair valued at the year end with the change in fair value
recognised through the income statement, in that year, as the
deferred period for consideration closed as at 31 March 2022.
5. Basis of preparation
In accordance with the Companies Act 2006, this preliminary
report based on the unaudited financial statements has been
prepared and approved by the Directors in accordance with UK
adopted international accounting standards, and in accordance with
the AIM rules and is not therefore in full compliance with IFRS.
The company prepares its parent company financial statements in
accordance with FRS 101.
The financial information for the year ended 31 March 2022 does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The independent
auditors' report on the full financial statements for the year
ended 31 March 2022 was unqualified and did not contain an emphasis
of matter paragraph or any statement under section 498 of the
Companies Act 2006. This preliminary announcement does not
constitute the Group's full financial statements for the year ended
31 March 2023.
The Group's full financial statements will be approved by the
Board of Directors and reported on by the auditors in July-August
2023. Accordingly, the financial information for the year ended 31
March 2023 is presented unaudited in the preliminary
announcement.
The consolidated financial statements have been prepared on an
historical cost basis, except for derivative financial instruments
that have been measured at fair value. The consolidated financial
statements are presented in pounds sterling and all values are
rounded to the nearest hundred thousand, expressed in millions to
one decimal point, except when otherwise indicated.
The Directors have prepared this financial information on the
fundamental assumption that the Group is a going concern and will
continue to trade for at least 12 months following the date of
approval of the financial information. In determining whether the
Group's accounts should be prepared on a going concern basis the
Directors have considered the factors likely to affect future
performance.
6. Notes supporting statement of cashflows
Borrowings Borrowings
due within due after
one year one year Total
GBP000 GBP000 GBP000
Net debt as 1 April 2021 (1,265) (3,290) (4,555)
Cash flows 134 1,017 1,151
Non cash-flows
* Interest accruing in the year 138 - 138
====================================== ============ =========== ========
Net debt at 31 March 2022 (993) * (2,273) (3,266)
Cash flows 236 756 992
Non cash-flows
- - -
* Interest accruing in the year
====================================== ============ =========== ========
Net debt at 31 March 2023 (757)** (1,517) (2,274)
====================================== ============ =========== ========
* The net debt as at 31 March 2022 for borrowing due within one
year of GBP993k as stated here, does not agree to the Balance Sheet
amount of GBP2,310k, as this does not include the bank overdraft of
GBP1,317k as at 31 March 2022.
** The net debt as at 31 March 2023 for borrowing due within one
year of GBP757k as stated here, does not agree to the Balance Sheet
amount of GBP1,925k, as this does not include the bank overdraft of
GBP1,168k as at 31 March 2023.
Cash and cash equivalents for the purpose of the statement of
cash flows comprises
2023 2022
GBP000 GBP000
Cash at bank available on demand 69 1,581
Cash on hand - 2
---------------------------------- -------- --------
Adjusted net cash generation 69 1,583
---------------------------------- -------- --------
Non- cash transactions from financing activities are shown in
the reconciliation of liabilities from financing transactions in
Note 7.
7. Alternative Performance Measures
In the reporting of financial information, the Directors have
adopted the APMs "Adjusted operating (loss)/profit", "Adjusted
operating cash generation", and "Adjusted net cash generation",
(APMs were previously termed 'Non-GAAP measures'), which is not
defined or specified under International Financial Reporting
Standards (IFRS).
These measures are not defined by IFRS and therefore may not be
directly comparable with other companies' APMS, including those in
the Group's industry. APMs should be considered in addition to, and
are not intended to be a substitute for, or superior to, IFRS
measurements.
Purpose
The Directors believe that these APMs assist in providing
additional useful information on the underlying trends, performance
and position of the Group. These APMs are also used to enhance the
comparability of information between reporting periods and business
units, by adjusting for non-recurring or uncontrollable factors
which affect IFRS measures, to aid the user in understanding the
Group's performance.
Consequently, APMs are used by the Directors and management for
performance analysis, planning, reporting and incentive setting
purposes and this remains consistent with the prior year. Adjusted
APMs are used by the Group in order to understand underlying
performance and exclude items which distort compatibility, as well
as being consistent with public broker forecasts and measures.
2023 2022
GBP000 GBP000
Operating profit/(loss) (IFRS measure) 658 (36)
Add back:
Amortisation charge 2,254 2,195
Share based payment charge 71 83
Exceptional items charge 122 121
---------------------------------------- -------- --------
Adjusted operating profit 3,105 2,363
---------------------------------------- -------- --------
8. Post balance sheet events
On 12th May 2023, the Company acquired the trade and assets of a
US based business, BevMetrics Inc. (BMI).
BMI is based in Denver, being a USA based provider of inventory
software solutions to the USA hospitality sector, and wholly owned
subsidiary of Identec AG.
The acquisition consisted of software IP and patents, an
established operating platform, and minor customers. BMI's five
employees will be incorporated into Vianet's USA subsidiary Vianet
Americas Inc. ("VAI") which has worked closely with BMI over the
past couple of years.
The initial consideration payable to BMI is GBP577,500 and has
been satisfied in the form of the issue of 700,000 ordinary Vianet
shares at a price of 82.5p each with contingent consideration
payable dependent on performance metrics. The contingent
consideration, to be calculated as 7% of net revenue of VAI for the
period 1 April 2024 through 31 December 2028, will be payable in
cash annually and is capped at a maximum future contingent
consideration of GBP4 million. That will be evaluated for the first
time in the year ended March 2024.
The provisional fair values of assets and liabilities acquired
is noted in the table below:
The trade and assets from the acquisition were transferred
immediately on completion of the transaction to the Company's US
subsidiary, Vianet Americas Inc. (VAI). VAI will continue to trade
with the existing BMI customers as plans to expand evolve in the
coming year.
Financing
At the time of publication, the company is in the process of
moving banks from Lloyds to HSBC. The expected date of change is 1
August 2023.
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END
FR GCGDLIUBDGXX
(END) Dow Jones Newswires
June 13, 2023 06:12 ET (10:12 GMT)
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