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Vendman acquisition pushes Vianet results higher
Data and business insight technology company Vianet Group issued its final results for the year ended 31 March on Tuesday, reporting revenue of £14.56m, up from £14.26m year-on-year.
The AIM-traded firm said adjusted operating profit from Smart Machines was £1.07m, including a contribution from Vendman of £0.12m, a total increase of 20.1%, or 6.7% excluding Vendman.
Recurring revenues remained "strong" at 90%, up from 85%, which the board said was helped by the Vendman acquisition in October last year and the transition from capital to annuity based sales in Smart Machines.
Its gross margin remained stable at 70%, in line with the prior year, while its operating profit, pre-amortisation of intangibles, share options and exceptional costs, was up 9.2% at £3.62m.
Profit before tax was ahead 41.5% at £2.05m post exceptional items.
Vianet reported operating cash generation of £2.97m, down from £3.93m, with net cash standing at £1.2m, down from £3.45m, though it was post the acquisition of Vendman.
Basic earnings per share before tax and post-exceptional costs were 7.42p, up from 5.30p, with the board proposing a final dividend of 4.00p per share, giving a full-year total of 5.70p per share.
"Vianet has made significant steps towards the delivery of its earnings transformation plan and continues to benefit from its focus on exploiting growth opportunities in the Smart Machines division whilst optimising performance in the Smart Zones division," said chairman James Dickson.
"The group has a proven track record of converting data from its IOT connected devices into actionable information and solutions for b2b markets.
"We continue to develop and grow our working relationships with our blue-chip customer base where contracted recurring revenues now represent over 90% of turnover."
Dickson said the acquisition of Vendman, with around 200,000 mobile connections and the roll-out of the recently-won global coffee contract, was expected to be "transformational" for the Smart Machines division and should drive "significantly increased" earnings for the group in the next few years.
"The group has high levels of recurring income, strong cash flow and a healthy balance sheet, which means we are well placed for further investment to accelerate Smart Machines expansion and for selective acquisitions.
"The board is confident that the group's long term strategy is the right one and that it is positioned to deliver earnings growth and expand future strategic options."