02 May 2023

Vianet Group plc

("Vianet" or the "Group")

Trading 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 platform ("IOT"), today announces the following trading update, and notifies that it will release its results for the year ended 31 March 2023 on Tuesday, 13 June 2023.

·    Full year turnover is expected to be up c 7% to over £14.0m (FY 2022: £13.2m and FY 2021: £8.4m).

·    Operating profit is anticipated to be up c 30% at £3.1m (FY 2022: £2.4m and FY 2021: £0.7m loss) which is ahead of market expectations.

Contract renewals and new contract wins have been encouraging, and recurring revenue from long term customers remains high at over 85% of turnover. Additionally, our gross margins continue to remain strong at over 65% despite the challenge of semiconductor supply chain stock premium costs, which have risen by £230k compared to FY 2022.  

Cash generation, pre working capital adjustments, is expected to be c £3.5m representing over 100% of EBITDA and signifying a return to the robust pre-pandemic levels of profit to cash conversion. We have applied to HMRC for a £0.9m tax refund, in respect to R&D losses for FY 2021 and FY 2022, which we expect to receive in Q1, subject to any follow up clarifications from HMRC. An estimated £1.8m of remaining historic trading losses will be carried forward and, where possible, applied to the FY 2023 tax calculations.

The year to March 2023 has seen a concerted commercial focus on the launch and the migration of existing customers to our new SmartVend vending management platform, and also the launch of SmartDraught which provides the hospitality industry with an increasingly comprehensive beverage management system.  In addition, the team has made excellent progress towards commercialising our solutions in new verticals, and in developing partnerships with both Suresite and QR payment solutions provider, Vendekin. We believe that we continue to be at the forefront of our chosen industries' development and look forward to being able to elaborate on our progress in the FY 2023 results announcement.

James Dickson, Chairman of Vianet, commented:

"Despite facing challenging economic conditions and global supply chain pressures, I am delighted that a strong team performance has resulted in the Group making significant progress on several key projects and initiatives and on delivering good financial results.

The continued progress we have made means we are excited about our FY 2024 prospects to accelerate our vending connection footprint, resume growth in our UK hospitality operations, gain significant traction in new verticals, and achieve meaningful expansion for Vianet Americas.

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About Vianet

Vianet Group capture and process operational data to produce critical insight, analysis and actionable information enabling customers to transform business performance.

Since its Admission to AIM in 2006, the Group has grown from its core beer monitoring business to widen its offering and 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 a footprint of over 250,000 connected devices 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 to a customer's asset or system. The device then sends data back via our IOT platform to cloud based servers. The flexibility and functionality of the device means the technology can be applied to any machine which has the capability to output data. In our award-winning end-to-end solution the device is also used to connect our contactless payment solution and communicate payment terms to our cloud-based payment services providers.

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 via a single 4G LTE communications hub. The technology was originally developed for beverage and asset management in drinks retailing but can be utilised with any data gathering device with a digital output such as gaming machines, utilities management. and POS.

For further information, please visit www.vianetplc.com