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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vianet Group Plc | LSE:VNET | London | Ordinary Share | GB00B13YVN56 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 12.50 | 12.08% | 116.00 | 115.00 | 117.00 | 116.00 | 105.00 | 105.00 | 57,417 | 13:13:27 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Information Retrieval Svcs | 14.12M | 161k | 0.0055 | 210.91 | 34.26M |
From Apr 2019 to Apr 2024
TIDMVNET
RNS Number : 2951J
Vianet Group PLC
04 December 2018
Press release 4 December 2018
Vianet Group plc
("Vianet", "Company" or "the Group")
Interim 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"), is pleased to announce its interim results for the six months ended 30 September 2018.
Financial summary (including Vendman)
Hot Features
Premium
-- Revenue increase of 14.43% to GBP7.68 million (H1 2018: GBP6.71
million)
-- Recurring revenues at 88% (H1 2018: 90%)
-- Adjusted operating profit(a) up 5.93% to GBP1.80 million
(H1 2018: GBP1.70 million)
-- Operating profit post exceptional items up 28.67% to GBP1.69
million (H1 2018: GBP1.32 million)
-- Profit before tax up 10.46% to GBP0.99 million (H1 2018:
GBP0.90 million)
-- Basic earnings per share up 36.16% at 3.05p (H1 2018: 2.24p),
including a tax adjustment charge of 0.51p
-- Operational cash generation(b) of GBP0.72 million (H1 2018:
GBP1.25 million)
-- Net debt(c) of GBP1.00 million (H1 2018: net cash GBP2.72
million)
-- Interim dividend of 1.70p (H1 2018: 1.70p)
Divisional highlights
-- Smart Machines (including Vendman) growth continues with
5,427 new unit sales (H1 2018: 2,395 units) exceeding FY
2018 by over 900 units
-- Smart Machines adjusted operating profit(a) of GBP0.68 million,
growth of 42.71% (H1 2018: GBP0.47 million), unadjusted profit
GBP0.50 million (H1 2018: GBP0.16 million)
-- Smart Zones adjusted operating profit(a) of GBP2.13 million
(H1 2018: GBP2.27 million), unadjusted profit GBP1.95 million
(H1 2018: GBP1.95 million)
-- Vianet Americas reduced losses to GBP0.03 million (H1 2018:
GBP0.07 million)
Post H1 period end
-- Ei Group plc contract renewal including technology upgrade
for further 24 months
Notes
a) Adjusted operating profit is profit before exceptional costs, amortisation, interest and share based payments
b) Operational cash generation is pre LTIP taxation of GBP0.50m
c) Net debt impacted by both the drawdown of a GBP2.00m term loan for the Vendman acquisition and strategic investments in the technology stack, annuity model and stock.
Commenting on the interim results, James Dickson, Chairman of Vianet Group plc, said:
"I am pleased to report that the Group's IOT platform investment and focus on growth areas has resulted in a 6% year on year increase in operating profit for the six months to 30 September 2018. In addition, the Group's high level of recurring revenue has been further strengthened by growth in the Smart Machines division, and the overall prospects for the second half look increasingly assured.
Vianet's medium to long term prospects are exciting as we increasingly demonstrate that our strategy of leveraging the power of our cutting-edge technology to bring valuable business insight to our customers is the right one. Whilst growth and profitability are influenced by the challenging backdrop to the UK pub sector, the Group has excellent prospects in Smart Machines and the wider hospitality sector for Smart Zones.
Recent investment in our cloud based IOT platform and new data analytics will accelerate Vianet's growth plans from existing customers and sectors, as well as new industry verticals. We have a solid financial platform for further expansion and development. The Board is confident that the Group is capable of delivering sustained growth."
- Ends -
An audio cast of the interim results presentation, given by Stewart Darling (Chief Executive) and Mark Foster (Chief Finance Officer), was released this morning, Tuesday, 4 December 2018 at 07.00 hrs and is available on the Group's website, www.vianetplc.com.
An analyst briefing will be held today at 09.30hrs at Cenkos, 6-8 Tokenhouse Yard, London EC2R 7AS.
Enquiries:
Vianet Group plc
James Dickson, Chairman Tel: +44 (0) 1642 358
Stewart Darling, CEO 800
Mark Foster, CFO
www.vianetplc.com
Cenkos Securities plc
Stephen Keys / Camilla Hume Tel: +44 (0) 20 7397
8900
www.cenkos.com
Media enquiries:
Yellow Jersey PR
Sarah Hollins Tel: +44 (0)7764 947
Henry Wilkinson 137
vianet@yellowjerseypr.com Tel: +44 (0)7951 402336
www.yellowjerseypr.com
Chairman's Statement
I am pleased to report that the Group's IOT platform investment and focus on growth areas has resulted in a 6% increase in operating profit for the six months to 30 September 2018, compared to the same period last year. In addition, the Group's high level of recurring revenue has been further strengthened by growth in the Smart Machines division.
The Smart Machines division adjusted operating profit was up over 42% to GBP0.68 million (H1 2018: GBP0.47 million) helped by a strong year on year increase in the number of connected devices deployed. There was particularly good progress with the integration of Vendman, and early stage success in transforming approximately 200,000 Vendman mobile connections to higher value Smart Machines connections, is validating our strategy and opening up attractive cross selling opportunities.
Helped by investment in Pubco data analytics capability and its increased automation of transactional processes, adjusted operating profit in the Smart Zones division remained stable at GBP2.13 million (H1 2018: GBP2.27 million). This performance was achieved despite challenging market conditions for our customers, sales pipeline delays due to Pubco corporate activity and our managed compliance service being held back by the UK beer supply chain being adversely impacted by the Europe wide shortage of CO2 gas over the summer months. Vianet Americas added a further 32 new sites helping to reduce H1 year on year adjusted operating losses to GBP0.03 million (H1 2018: GBP0.07 million).
Results
Turnover of GBP7.68 million (H1 2018: GBP6.71 million) was up 14.43% helped by the strategic acquisition of Vendman although held back both by pub closures in Smart Zones and the short term impact of our focus on transitioning from capital sales to annuity streams in Smart Machines. Whilst this shift from capital to annuity sales holds back short term revenues and profits, it provides future earnings visibility and is more profitable over the life of the contracts.
The Group's operating profit post exceptional items was up 28.6% to GBP1.69 million (H1 2018: GBP1.32 million) whilst profit before taxation increased 10.5% to GBP0.99 million (H1 2018: GBP0.90 million).
Group earnings per share grew 36.1% to 3.05 pence (H1 2018: 2.24 pence).
Dividend
Reflecting the Board's continued confidence in the Group's growth plans, we are pleased to maintain the interim dividend at 1.70 pence per share (H1 2018: 1.70 pence per share), payable on 30 January 2019 to shareholders on the register at 14 December 2018. A final dividend of 4.00 pence per share was paid in respect of the year ended 31 March 2018 on 28 July 2018.
Outlook
The Board believes that Vianet's medium to long term prospects are exciting as we are increasingly demonstrating that our strategy of leveraging the power of our cutting edge technology platform to bring valuable business insight to our customers is the right one.
Whilst growth and profitability are influenced by the challenging backdrop to the UK pub sector, the Group has excellent prospects both in Smart Machines and the wider hospitality sector for Smart Zones and the Board is confident that the management team can deliver long term growth.
Smart Machines growth prospects look increasingly assured particularly following the acquisition of Vendman. Additionally, the transition in this division's revenues towards a significantly greater level of annuity, provides improved visibility and quality of future earnings.
As we expand the iDraught(TM) footprint, develop new revenues from data analytics to the wider hospitality sector and deliver efficiencies from increased automation in our Smart Zone division, we are optimistic that the division's contribution can be sustained despite the challenges faced in its existing customers' core market of UK pub retailing.
Underpinned by high levels of recurring revenue, underlying Group cash flow is strong, despite our significant investment in this transitional year, and we have a solid financial platform to facilitate further expansion and development.
The Board remains confident that the Group is capable of delivering consistent and sustained growth, within the parameters of its influence and control.
James Dickson
Chairman
4 December 2018
Chief Executive and Chief Financial Officer Review
Underlying trading for the six months to 30 September 2018 has seen improvement as compared to the same period last year. The Group's strategy to drive sales of Smart Machines connected devices and contactless payment services has materially progressed, albeit progress was partially offset by the continued impact of pub disposals for Smart Zones. The Board's strategic decision to transition to an annuity revenue model in Smart Machines has underpinned this acceleration in device connections, and despite the impact on revenue in the short term, it will be significantly more profitable for the business over the life of our contracts. The proportion of recurring revenue has continued at high levels and reduced exceptional costs of GBP0.11 million (H1 2018: GBP0.39 million) were in line with our expectations and principally relate to costs associated with network obsolescence and staff transitional costs.
In 2017 we embarked upon a substantial project named NEO to develop a new Internet of Things and Data Analytics platform with the aim of transforming how we do business with customers through the provision of new connected device capability and insight-led capabilities that support significantly improved decision making. This project, with a GBP2.1 million investment to date, will replace all legacy technology in the Smart Zones business whilst enabling rapid prototyping and innovation capabilities in a platform that can scale at pace to support business growth. The technology is rolling out successfully to customers, and will underpin and support future growth plans.
As anticipated, the operational cash generation was down at GBP0.72 million (H1 2018: GBP1.25 million) before one off taxation relating to the issue of LTIP shares. The key impacts on cash generation were:
-- NEO technology platform investment of GBP0.9 million;
-- Transition to annuity stream from our traditional capex model in Smart Machines reduced turnover by GBP0.5 million with a margin and cash impact of GBP0.25 million;
-- Supply chain stock on hand increased by GBP0.5 million to ensure we have sufficient stock on hand to meet demand and to secure key components impacted by worldwide component pressures; and
-- One off PAYE taxation of GBP0.49 million associated with the LTIP award. The post PAYE deduction award was satisfied by the transfer of shares from the Employee Benefit Trust to participants.
As a result of these movements, our normal dividend payments and additional bank facilities to acquire Vendman, the Group had an overall net debt position of GBP1.00 million at the half year compared to GBP2.72 million net cash last year.
The Group's underlying cash generation remains strong with GBP1.91 million (before working capital movements and one off LTIP taxation) compared to GBP1.50 million in the same period last year, which represents a GBP0.4 million (27.4%) year on year growth. The second half is expected to be stronger as NEO technology investment tails off, supply chain stock working capital movement stabilises, and one off LTIP PAYE tax is not repeated.
Smart Machines
Smart Machines had a strong increase in the number of device connections and contactless payment sales with more devices being sold in the first half of this financial year than the whole of FY2018.
Helped by the addition of Vendman the top line revenue growth increased by 120% even though over 60% of device sales were on an annuity only basis. Whilst our upfront cash receipts will be reduced, the annuity model will be more profitable over the life of contracts and provides for a clearer projection of business performance as it lessens the impact of variable capital sales.
The major contract roll out with a leading global coffee supplier is currently achieving a lower rate of device deployment than anticipated due to their delays in implementing a large-scale IT project. Whilst this slower pace has been frustrating, we are encouraged that action is being taken and a higher rate of deployment is being achieved recently against what remains a significant roll out plan.
Vendman growth to GBP2.57 million turnover and GBP0.34 million operating profit in the Group's first year of ownership is validating our strategic growth plans for our portfolio of market leading solutions for unattended retail. During H1 Vendman contributed GBP1.38 million in turnover and GBP0.22 million in operating profit.
Additionally, the division is creating significant cross selling opportunities with a larger market for the sale of IOT connectivity and real-time data, accelerated rollout of contactless payment technology and new opportunities for its ERP and mobile platform capability.
Momentum into H2 2019 has been encouraging and it is anticipated that Smart Machines growth in connected devices and contactless payment will continue and significantly enhance future earnings growth.
Smart Zones
The underlying performance of the Group's core beer monitoring business remained relatively stable over the period with further new sales of iDraught(TM) which now account for approximately 27% of the Group's beer monitoring base by number of installations.
Over the period, Smart Zones slowed down by corporate activity amongst large customers secured 44 new beer monitoring installations (H1 2018: 119). Pub disposals resulted in a net reduction of circa 350 sites for the division to approximately 12,600 sites.
Our continued confidence in the future growth prospects for iDraught(TM) in the UK, is driven by recent commitments for technology upgrades in existing major customers and installations for new customers. In addition, our investment in new technology and the migration of data and services to the cloud has significantly increased the opportunity for Smart Zones to capture data from a wider array of sources for our customers and roll-out enhanced insight and data services.
In the US, the roll out of iDraught(TM) has increased the installation base to 279 sites. The increase in installation base combined with a refined cost base contributed to a GBP0.39 million reduction in losses and we expect the loss position to narrow further as we drive improved sales traction in major publicly listed businesses.
Looking forward
The Group's significant investment in our cloud based IOT platform, new data analytics and insight based capabilities will accelerate Vianet's growth plans by developing higher quality revenue streams from existing customers and sectors, whilst making our cutting-edge end-to-end capability highly relevant to other industry sectors.
We believe that this strategic approach combined with our focus on the Smart machines market, will allow the Group to capitalise on the transformational opportunities that the combination of connected devices, predictive analytics and insight will offer in the coming years.
Stewart Darling Mark Foster Chief Executive Chief Financial Officer 4 December 2018
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2018
Before Total Before
Exceptional Exceptional Unaudited Exceptional Exceptional Unaudited Audited
6 months 6 months 6 months 6 months 6 months 6 months Year
Ended Ended Ended Ended Ended Ended Ended
30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March
2018 2018 2018 2017 2017 2017 2018
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Continuing
operations
Revenue 3 7,683 - 7,683 6,714 - 6,714 14,561
Cost of sales (2,465) - (2,465) (2,016) - (2,016) (4,381)
================ ===== ============= ============ ========== ============= ============= ========== ==========
Gross profit 5,218 - 5,218 4,698 - 4,698 10,180
Administration
and other
operating
expenses 4 (3,414) (112) (3,526) (2,995) (388) (3,383) (7,097)
================ ===== ============= ============ ========== ============= ============= ========== ==========
Operating
profit pre
amortisation
and share
based payments 3 1,804 (112) 1,692 1,703 (388) 1,315 3,083
---------------- ----- ------------- ------------ ---------- ------------- ------------- ---------- ----------
Intangible
asset
amortisation (597) - (597) (344) - (344) (865)
Share based
payments (68) - (68) (73) - (73) (142)
================ ===== ============= ============ ========== ============= ============= ========== ==========
Operating
profit post
amortisation
and share
based payments 1,139 (112) 1,027 1,286 (388) 898 2,076
Net finance
(costs)/income (34) - (34) 1 - 1 (28)
================ ===== ============= ============ ========== ============= ============= ========== ==========
Profit from
continuing
operations
before tax 1,105 (112) 993 1,287 (388) 899 2,048
Income tax
expense 5 (144) - (144) (287) - (287) (239)
---------------- ----- ------------- ------------ ---------- ------------- ------------- ---------- ---------- Profit and other comprehensive income for the year 3 961 (112) 849 1,000 (388) 612 1,809 ---------------- ----- ------------- ------------ ---------- ------------- ------------- ---------- ---------- Earnings per share Continuing Operations - Basic 6 3.05p 2.24p 6.55p - Diluted 6 3.02p 2.23p 6.54p
Consolidated Balance Sheet
At 30 September 2018
Unaudited Unaudited Audited
As at As at As at
30 Sept 30 Sept 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
------------------------------- ---------- ---------- ----------
Assets
Non-current assets
Intangible assets 22,847 17,946 22,504
Property, plant and equipment 3,371 3,078 3,166
Total non-current assets 26,218 21,024 25,670
================================ ========== ========== ==========
Current assets
Inventories 1,556 1,012 1,086
Trade and other receivables 3,799 2,995 3,246
Deferred tax asset 247 173 391
Cash and cash equivalents 2,592 3,864 4,324
-------------------------------- ---------- ---------- ----------
8,194 8,044 9,047
=============================== ========== ========== ==========
Total assets 34,412 29,068 34,717
================================ ========== ========== ==========
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables 4,267 3,578 4,436
Borrowings 1,926 443 1,062
6,193 4,021 5,498
=============================== ========== ========== ==========
Non-current liabilities
Other payables 1,339 - 1,339
Borrowings 1,665 699 1,994
Deferred tax 874 395 872
3,878 1,094 4,205
------------------------------- ---------- ---------- ----------
Equity attributable to owners
of the parent
Share capital 2,874 2,843 2,872
Share premium account 11,530 11,287 11,519
Share based payment reserve 252 466 483
Own shares (754) (1,115) (1,114)
Merger reserve 310 310 310
Retained profit 10,129 10,162 10,944
-------------------------------- ---------- ---------- ----------
Total equity 24,341 23,953 25,014
================================ ========== ========== ==========
Total equity and liabilities 34,412 29,068 34,717
================================ ========== ========== ==========
Summarised Consolidated Cash Flow Statement
For the six months ended 30 September 2018
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ---------- ---------
Cash flows from operating activities
Profit for the period 849 612 1,809
Adjustments for
Net Interest payable/(received) 34 (1) 28
Income tax expense 144 287 239
Amortisation of intangible assets 597 344 865
Depreciation 215 177 378
Loss on sale of property, plant
and equipment 4 7 62
Share-based payments expense 68 73 142
Tax payment in respect of LTIP (495) - -
--------------------------------------- ------------ ---------- ---------
Operating profit before changes
in
working capital and provisions 1,416 1,499 3,523
Change in inventories (468) 296 219
Change in receivables (554) (288) (537)
Change in payables (169) (149) (126)
Change in provisions - (110) (105)
(1,191) (251) (549)
Net cash from operating activities 225 1,248 2,974
---------------------------------------- ------------ ---------- ---------
Cash flows from investing activities
Purchase of subsidiary - - (1,917)
Purchases of property, plant
and equipment (424) (193) (398)
Purchase of intangible assets (940) (788) (1,610)
Net cash used in investing activities (1,364) (981) (3,925)
---------------------------------------- ------------ ---------- ---------
Cash flows from financing activities
Net Interest receivable/(payable) (34) 1 (28)
Issue of share capital 13 - 261
Share options exercised - 103 103
New bank loans - - 2,000
Repayments of borrowings (329) (245) (450)
Dividends paid (1,108) (1,096) (1,562)
Net cash used in financing activities (1,458) (1,237) 324
---------------------------------------- ------------ ---------- ---------
Net decrease in cash and cash
equivalents (2,597) (970) (627)
Cash and cash equivalents at
beginning of period 3,922 4,549 4,549
Cash and cash equivalents at
end of period 1,325 3,579 3,922
---------------------------------------- ------------ ---------- ---------
Statement of changes in equity
Six months ended 30 September 2018
Share
Share based
Share premium payment Merger Retained
capital account reserve Own shares reserve profit Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2018 2,872 11,519 483 (1,114) 310 10,944 25,014
Dividends - - - - - (1,108) (1,108)
Issue of shares 2 11 - - - - 13
Share based payment - - 68 - - - 68
LTIP exercise - - (299) 360 - (556) (495)
Transactions with
owners 2 11 (231) 360 - (1,664) (1,522)
----------------------- --------- --------- --------- ----------- --------- --------- --------
Profit and total
comprehensive income
for the period - - - - - 849 849
----------------------- --------- --------- --------- ----------- --------- --------- --------
Total comprehensive
income less owners
transactions 2 11 (231) 360 - (815) (673)
At 30 September 2018 2,874 11,530 252 (754) 310 10,129 24,341
======================= ========= ========= ========= =========== ========= ========= ========
Six months ended 30 September 2017
Share
Share based
Share premium payment Merger Retained
capital account reserve Own shares reserve profit Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2017 2,843 11,287 418 (1,221) 310 10,624 24,261
Dividends - - - - - (1,096) (1,096)
Share based payment - - 73 - - - 73
Share option forfeitures - - (26) - - 26 -
Exercise of options - - 1 106 - (4) 103
Transactions with
owners - - 48 106 - (1,074) (920)
-------------------------- --------- --------- --------- ----------- --------- --------- --------
Profit and total
comprehensive income
for the period - - - - - 612 612
-------------------------- --------- --------- --------- ----------- --------- --------- --------
Total comprehensive
income less owners
transactions - - 48 106 - (462) (308)
At 30 September 2017 2,843 11,287 466 (1,115) 310 10,162 23,953
========================== ========= ========= ========= =========== ========= ========= ========
12 months ended 31 March 2018
Share
Share based
Share premium payment Merger Retained
capital account reserve Own shares reserve profit Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2017 2,843 11,287 418 (1,221) 310 10,624 24,261
Dividends - - - - - (1,562) (1,562)
Issue of shares 29 232 (50) - - 50 261
Share based payment - - 115 - - 27 142
Exercise of options - - - 107 - (4) 103
Transactions with
owners 29 232 65 107 - (1,489) (1,056)
----------------------- --------- --------- --------- ----------- --------- --------- --------
Profit and total
comprehensive income
for the year - - - - - 1,809 1,809
----------------------- --------- --------- --------- ----------- --------- --------- --------
Total comprehensive
income less owners
transactions 29 232 65 107 - 320 753
At 31 March 2018 2,872 11,519 483 (1,114) 310 10,944 25,014
======================= ========= ========= ========= =========== ========= ========= ========
Notes to the interim report
1. Statutory information
The interim financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The auditor's review report on the interim financial information for the six months ended 30 September 2018 is set out on page 16.
The financial information for the year ended 31 March 2018 has been derived from the published statutory accounts. A copy of the full accounts for that period, on which the auditor issued an unmodified report that did not contain statements under 498(2) or (3) of the Companies Act 2006, has been delivered to the Registrar of Companies.
These interim financial statements will be posted to all shareholders and are available from the registered office at One Surtees Way, Surtees Business Park, Stockton on Tees, TS18 3HR or from our website at www.vianetplc.com/investors
2. Basis of preparation
This consolidated half yearly financial information for the half year ended 30 September 2018 has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 March 2018, subject to the adoption of IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments". The directors have concluded that the adoption of these accounting standards has not had a material impact on the financial statements. The Group's accounting policies are based on the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU.
The financial information contained in the interim report has not been reviewed or audited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for complete financial statements.
3. Segmental information
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. The segment operating results are regularly reviewed by the Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance. Vianet Group is analysed into to two trading segments (defined below) being Smart Zones (mainly adopted in the leisure sector, including US (particularly in pubs and gaming)) and Smart Machines (mainly adopted in the vending sector (particularly in vending machines)) supported by Corporate/Technology costs.
The products/services offered by each operating segment are:
Smart Zones: design, product development, sale and rental of fluid monitoring equipment, data insights and related services
Smart Machines: design product development, sale and rental of machine monitoring equipment, data insights and related services.
Corporate/Technology: Centralised Group overheads along with technology related costs for the Group
The inter-segment sales are immaterial. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated assets and liabilities comprise items such as cash and cash equivalents, certain intangible assets, taxation, and borrowings. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one period.
The asset base of the Vianet Group plc cannot be split across Smart Zones, Smart Machines or Technology, so has been allocated to Smart Zones.
The segmental results for the six months ended 30 September 2018 are as follows:
Continuing Operations Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ----------------- ----------------------- --------
Total revenue 5,360 2,323 - 7,683
-------------------------------------- -------- ----------------- ----------------------- --------
Profit/(loss) before amortisation,
share based payments and
exceptional costs 2,126 675 (997) 1,804
-------------------------------------- -------- ----------------- ----------------------- --------
Pre-exceptional segment
result 2,018 542 (1,421) 1,139
Exceptional costs (52) (14) (46) (112)
-------------------------------------- -------- ----------------- ----------------------- --------
Post exceptional segment
result 1,966 528 (1,467) 1,027
Finance income - - 11 11
Finance costs (17) (28) - (45)
Profit/(loss) before taxation 1,949 500 (1,456) 993
Taxation (144)
-------------------------------------- -------- ----------------- ----------------------- --------
Profit for the year from
continuing operations 849
-------------------------------------- -------- ----------------- ----------------------- --------
Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------------- ----------------------- --------
Segment assets 27,570 3,905 2,935 34,410
Total assets 27,570 3,905 2,935 34,410
----------------------- -------- ----------------- ----------------------- --------
Segment liabilities 9,010 - 1,061 10,071 Total liabilities 9,010 - 1,061 10,071 ----------------------- -------- ----------------- ----------------------- --------
Notes to the interim report (continued)
The segmental results for the six months ended 30 September 2017 are as follows:
Continuing Operations Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ----------------- ----------------------- --------
Total revenue 5,662 1,052 - 6,714
-------------------------------------- -------- ----------------- ----------------------- --------
Profit/(loss) before amortisation,
share based payments and
exceptional costs 2,270 473 (1,040) 1,703
-------------------------------------- -------- ----------------- ----------------------- --------
Pre-exceptional segment
result 2,185 318 (1,217) 1,286
Exceptional costs (229) (161) 2 (388)
-------------------------------------- -------- ----------------- ----------------------- --------
Post exceptional segment
result 1,956 157 (1,215) 898
Finance income - - 7 7
Finance costs (6) - - (6)
Profit/(loss) before taxation 1,950 157 (1,208) 899
Taxation (287)
-------------------------------------- -------- ----------------- ----------------------- --------
Profit for the year from
continuing operations 612
-------------------------------------- -------- ----------------- ----------------------- --------
Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------------- ----------------------- --------
Segment assets 24,888 - 4,180 29,068
Total assets 24,888 - 4,180 29,068
----------------------- -------- ----------------- ----------------------- --------
Segment liabilities 4,384 - 731 5,115
Total liabilities 4,384 - 731 5,115
----------------------- -------- ----------------- ----------------------- --------
Notes to the interim report (continued)
The segmental results for the 12 months ended 31 March 2018 are as follows:
Continuing Operations Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ----------------- ----------------------- --------
Total revenue 11,445 3,116 - 14,561
-------------------------------------- -------- ----------------- ----------------------- --------
Profit/(loss) before amortisation,
share based payments and
exceptional costs 4,531 1,070 (1,980) 3,621
-------------------------------------- -------- ----------------- ----------------------- --------
Pre-exceptional segment
result 4,350 595 (2,331) 2,614
Exceptional costs (283) (211) (44) (538)
-------------------------------------- -------- ----------------- ----------------------- --------
Post exceptional segment
result 4,067 384 (2,375) 2,076
Finance income - - 17 17
Finance costs (17) (28) - (45)
Profit/(loss) before taxation 4,050 356 (2,358) 2,048
Taxation (239)
-------------------------------------- -------- ----------------- ----------------------- --------
Profit for the year from
continuing operations 1,809
-------------------------------------- -------- ----------------- ----------------------- --------
Smart Smart Machines Corporate/Technology
Zones Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------------- ----------------------- --------
Segment assets 25,883 4,083 4,751 34,717
Total assets 25,883 4,083 4,751 34,717
----------------------- -------- ----------------- ----------------------- --------
Segment liabilities 8,606 - 1,097 9,703
Total liabilities 8,606 - 1,097 9,703
----------------------- -------- ----------------- ----------------------- --------
Notes to the interim report (continued)
4. Exceptional items
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Exceptional costs 112 388 538
112 388 538
------------------- ------------ --------- ---------
Exceptional costs principally relate to employee transition costs and network obsolescence costs.
5. Tax
The charge for tax is based on the profit for the period and comprises:
6 months 6 months Year
Ended Ended Ended
30 Sept 30 Sept 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
United Kingdom corporation
tax 144 287 239
----------------------------- --------- --------- ---------
The tax charge reflects the utilisation of brought forward trading losses, which had previously been recognised as a deferred tax asset, against the taxable profit for the period within Vianet Limited
6. Earnings per share
Earnings per share has been impacted by the reversal of a deferred tax asset provision realised in previous years.
Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders (GBP849k) by the weighted average number of ordinary shares outstanding during the period.
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
The table below shows the earnings pre and post the impact of the movement in the deferred tax asset.
30 September 2018 30 September 2017
Earnings Basic Diluted Earnings Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
GBP000 GBP000
Pre-tax profit attributable
to equity shareholders 993 3.56p 3.53p 899 3.29p 3.27p
Post-tax profit attributable
to equity shareholders 849 3.05p 3.02p 612 2.24p 2.23p
Pre-tax, pre-exceptional
profit attributable
to equity shareholders 1,105 3.97p 3.93p 1,287 4.71p 4.68p
Post-tax, pre-exceptional
profit attributable
to equity shareholders 961 3.45p 3.42p 1,000 3.66p 3.64p
30 Sept 30 Sept
2018 2017
Number Number
Weighted average number of ordinary shares 27,867,264 27,302,694
Dilutive effect of share options 246,112 184,041
--------------------------------------------- ----------- ----------- Diluted weighted average number of ordinary shares 28,113,376 27,486,735 --------------------------------------------- ----------- -----------
INDEPENDENT REVIEW REPORT TO VIANET GROUP PLC
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2018 which comprises the consolidated statement of comprehensive income, the consolidated balance sheet, the summarised consolidated cash flow statement, the statement of changes in equity and the related explanatory notes. We have read the other information contained in the half yearly financial report which comprises only the Chairman's Statement, and the Chief Executive and Chief Financial Officer Review and considered whether they contain any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union using the historic cost convention. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in note 2.
Our responsibility
Our responsibility is to express to the company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2018 is not prepared, in all material respects, in accordance with the basis of accounting described in note 2.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds
4 December 2018
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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December 04, 2018 02:00 ET (07:00 GMT)
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