LONDON (Alliance News) - Vianet Group PLC on Wednesday said that it expects annual profit to rise in 2018 financial year, as the Smart Machines segment's revenue benefited from acquisition and contract win.
The technology and data company said that it traded in line with expectations during the second half of its 2018 financial year and anticipates annual operating profit to come in ahead of last year's outturn of GBP3.3 million.
Vianet said it will pay final dividend of 4.00 pence per share, unchanged from the prior year.
Shares in Vianet were trading 7.2% lower at 128.48 pence per share on Wednesday.
The company's Smart Machines division continued to deliver growth following the recent acquisition and the material contract win. The year before, its revenue was GBP2.3 million.
In October last year, the group bought the UK-based software developer Vendman Systems Ltd for GBP4.3 million in cash. Also, at the end of November, it announced a new contract with an undisclosed coffee firm.
Whilst Smart Machines revenue stream transition from capital sales to recurring annuity suppresses short term financial performance, the company said, it is providing greater visibility and quality of future earnings for this division.
Vianet said that its Smart Zones division's revenue was slightly down year-on-year, due to the challenges faced in its customers' core market of the UK pub retailing, the company said. The prior year, it generated revenue of GBP11.9 million.
However, Vianet hopes that investment in Pubco data analytics capability and its increased automation of transactional processes will help to sustain future contribution.
"The group will again deliver good year-on-year profit growth. Importantly, this has been achieved whilst shifting the balance of Smart Machines sales from capital to recurring annuity based income," said Chairman James Dickson.
"The group's medium to long term prospects are exciting, particularly for telemetry and payment solutions for the coffee vending market, where momentum is being boosted by good progress integrating the Vendman acquisition, and better visibility on delivery of the material contract win with a global coffee company," Dickson added.
Vianet Grp (VNET)