Although Vianet (LON: VNET) did not quite return to profit in the year to March 2022, it was highly cash generative and nearly covered the capital investment in the business. Vianet is on course for a substantial profit in the current year.
During the second half, the Smart Zones division, which provides data and stock management information for pubs and bars, went back to full billing of clients. They had been paying a percentage of normal fees during the Covid restrictions.
That helped Smart Zones improve its revenues in the second half. The US business is still making a small loss, although there are new opportunities being investigated that could move it into profit. If they do not, then the business will be reassessed.
The Smart Machines division continues to win new business and secure 3-5 year renewals from existing customers. It provides remote data and contactless payments services for vending machines operators and other clients.
The reduced usage of vending machines because of Covid restrictions and the continued reduction in working in offices has not hampered the business. The data provided to clients means that they can assess when a vending machine requires to be refilled or maintained, thereby reducing the number of visits and saving money.
Additional services are being launched are margins are expected to be higher than previously.
Results
In the year to March 2022, group revenues improved from £8.37m to £13.2m, although that is still lower than in 2019-20. Recurring revenues were 88% of the total. The loss was reduced to £170,000. Net operational cash inflow was £2.4m.
There is no dividend this year. An improved balance sheet with reduced net debt of £3m and a return to previous trading levels should enable a dividend to be paid.
That may not happen this year when revenues are expected to grow to £15.7m and a pre-tax profit of £1.1m is estimated. Next year, forecast revenues of £17.8m and pre-tax profit of £2.5m are both higher than the levels in 2019-20.