Business & Economy
Vianet reveals higher profits – and cuts charges to help clients navigate coronavirus
March 26, 2020
A data monitoring firm has revealed increased earnings – at the same time as it has slashed convenience and pub sector charges to help customers fight the coronavirus outbreak.
Vianet says full-year profits will come in at more than £4 million for the period to March 31, with the figure surpassing the £3.85 million recorded 12 months ago.
However, the Stockton company has also cut charges to customers affected by the Government’s lockdown of leisure activities, with bosses “encouraged” by the response.
The firm is known for offering services via the Internet of Things that provide convenience sector businesses with real-time information on vending machine stock and allow pub industry operators to closely scrutinise beer volume and flow.
Speaking in a trading update today (Thursday, March 26), officials say the company is “well-equipped to weather (the coronavirus) storm”, adding they expect their action on charges to help it “emerge with even stronger customer relationships.”
According to its changes, clients using Vianet’s Smart Zones provision – which connects multiple assets from equipment such as gaming machines and electronic point of sale payment devices – have been offered a reduced rate to “maintain business continuity.”
Furthermore, clients utilising Vianet’s Smart Machines – which provide real-time data collection – can access reduced weekly charges for closed sites.
James Dickson, chairman, said: “The mandatory closures of pubs, bars and restaurants in the UK will have a material effect on almost all our Smart Zones customers.
“In anticipation of this, we had therefore proposed a reduced rate on all our contracts in order to maintain business continuity and to avoid more expensive re-connection costs for customers when pubs re-open.
“We are encouraged by our customers’ responses and expect to be able to protect a meaningful portion of the group’s recurring revenue during this period of pub closures.
He added: “It is too early to predict the overall impact of COVID-19 on our Smart Machines business, as we have seen mixed trading impacts across the range of our customers.
“Some vending machines, including those in hospitals, supply chains and emergency services are trading very well, whereas those in closed city centre offices have experienced little or no sales.
“We are providing impacted Smart Machines customers with the option of a reduced weekly charge in closed sites.
“Positively, we are seeing increased demand and usage of our contactless payment solution, rather than ‘dirty’ coins.”
Alongside changes to customer charges, Vianet has also revised internal fiscal measures, with a recommended final dividend of £1.16 million withdrawn.
However, James says the company remains well placed to ride through coronavirus’ choppy waters, revealing it will utilise Chancellor Rishi Sunak’s previously announced financial package to guide its progress.
He said: “The board’s absolute focus is on ensuring that Vianet comes through this global crisis in a position to continue to take advantage of its exciting growth opportunities.
“The start to the new financial year will be challenging, however, the group is well equipped to weather this storm and emerge with even stronger customer relationships.
“(Indeed), ahead of the very recent impact of the COVID-19 restrictive measures, momentum and performance had been encouraging across both divisions.
“The group will take advantage of the full range of business support announced by the Government and is well advanced with the job retention scheme.
He added: “We are confident the actions taken mean the group has a cash runway well beyond the period which the Government has indicated as being the likely duration of this crisis.
“As such, the board believes the group is well placed to absorb a prolonged period of uncertainty.”
Last year, Vianet revealed it had secured contracts worth around £10 million with “leading” vending operators.
According to bosses’ announcement at the time, the combined contracts would cover 20,000 units and generate revenues in the region of £10 million over their three to five-year durations.
*Pictured are Vianet chief finance officer Mark Foster and chief executive Stewart Darling