Stockton data firm Vianet Group bullish despite 13% drop in sales

Stockton-based data monitors Vianet say they are in 'good shape' for the future despite a dip in profits and sales

James Dickson, chairman of Vianet

Directors at Teesside data monitoring company Vianet Group say they are making good progress across its divisions despite posting a drop in profits and sales.

The firm, which employs around 120 at its Stockton headquarters, provides real-time monitoring systems and data management services for the leisure, vending and forecourt services sectors.

But the last 12 months to its financial year end in March has seen the business withdraw from lower margin work in the leisure and fuel divisions, including exiting work with Liquefied Petroleum Gas, to focus on growth areas.

The move impacted on revenues, which dropped by 13% from £21.09m to £18.34m, while pre-tax profits also dropped by 11% to £1.6m from £1.8m.

In delivering final results to shareholders, the firm said its performance was also held back by the uncertainty created by UK Government regulations for pub companies, that affected sales of the company’s beer flow monitoring products.

However, group chairman James Dickson said the uncertainty of the past few years, surrounding the Statutory Code for Pub Companies, was about to be lifted following a balanced Government response to the pub company consultation last week.

New legislation includes proposals for controlling beer flow monitoring which will not affect business long-term, but Dickson said its implementation will remain a customer distraction for some time.

He said: “Turnover is down, on the back of our decision to exit the low-margin liquid petroleum gas maintenance market on petrol forecourts.

“It’s also down to the uncertainty caused by the Statutory Code, cut-backs on capital spend by pub companies during this time, and the cleaning up of pub estates by disposing of poorly performing pubs.

“We have seen the downside, in particular the lack of hardware sales on the pub monitoring side of the business.

“All this, coupled with an on-going efficiency programme, shows a good result for the company.

“Putting the existing voluntary codes onto a statutory footing shouldn’t make any difference to on-going operations – the question mark is how long will it take to implement.

“Effectively, what we’ve got is a core beer business that should be turning the corner now, a vending business that’s seeing growth.

“The fuel business has been in profit for each of the last nine months, December aside. These are good, solid foundations.

“We’ve got a great team in Stockton and we feel we’re in good shape.”

Leisure margins have improved by 15% as a result of product mix and efficiencies, meanwhile several major customers have extended their contracts including Enterprise Inns, which has upwards of 4,000 venues around the UK, Heineken, Charles Wells and Daniel Thwaites.

Pilots of the company’s iDraught, a market leading technical breakthrough for the licensed trade that offers perfect serves of draught beer, post mix drinks, spirits and draught wine have gone well, claim bosses.

Commercial contracts with several national USA chains are also lined up, and a growth strategy is being developed to be actioned over the next two to three years.

While the pub sector remains challenging, the firm said good progress is being made, particularly for telemetry solutions for the coffee vending market.

Chief executive Stewart Darling said: “All the main firms – Cafe Nero, Starbucks, Costa Coffee and so on – recognise that people want great coffee and coffee retailers are trying to bring that experience to vending.

“They have to make sure they have better machines, be able to maintain them and get more information from them, and that’s where our telemetry comes in.

“It’s a great growth area for us.”

Chief executive Stewart Darling said: “We help our customers make better decisions and become more profitable, everything is hinged around that. We’ve built a great product portfolio that has driven growth over the last year. The USA pilots have seen great results

“We are trying to create credibility and reputation, rather than an all-out approach on the market.

“There is a real focus on driving iDraught among retailers in the UK, and we are quite measured about that.

“We are mindful that some of our customers still have some treacle to wade through that slows investment decisions. But we are very clear on our ambitions.”

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