Vianet boss more confident than ever despite 4G transition delays slowing growth

The chairman of drinks and vending tech creator Vianet says he has never been more confident about the company's future, despite a fall in operating profits.

The Stockton-based specialist in Internet of Things systems reported a fall in operating profit pre amortisation and share based payments in the six months to the end of September to £967,000, down from £1.16m in the same period last year. That came despite a slight rise in revenue to £7.19m in the half year, up from £7.18m.

But like-for-like adjusted operating profit was up 24% to £1.5m. That came before the firm's acquisition of US-based Beverage Metrics Inc (BMI) earlier this year - a move designed to fast track Vianet's entry into the North American hospitality industry.

In half year results posted to the London Stock Exchange, Vianet also said the purchase of BMI had strengthened its UK business, giving it more scope to provide comprehensive drinks management systems to its customers. Across the firm's vending machine tech division, its Smart Machines line grew adjusted operating profits despite delays in the upgrading of 3G to 4G network hampering sales.

And its core drinks monitoring division, Smart Zones, saw a "resilient" performance with a modest increase in adjusted operating profits from £1.89m to £1.96m. The firm said it had seen a slowing down of pub closures in the UK, across its customer base. Meanwhile the acquisition of BMI had added about 120 sites in the US to its portfolio.

James Dickson, chairman and CEO of Vianet Group plc, said: "Overall, we have had a notable improvement in the group's performance with a good first half of the year despite challenging market conditions and the sales drag resulting from unattended retail customers taking time to understand the UK's 3G switch-off and develop their upgrade programmes. Although gradual at first, this transition is now providing a catalyst for continued sales growth in the second half of the year, underpinned by an increase in urgency in our customers' transition from 3G to 4G networks.

"The efforts and strategies implemented in the first half are now bearing fruit, leading to robust sales growth across our hospitality, unattended retail, and forecourt sectors. This progress reinforces our confidence in meeting management's profit expectations for the full year."