Vianet Grp Regulatory News (VNET)

Brulines Group plc

("Brulines" or "the Group")

Trading Update

Brulines Group plc (AIM:BRU), the leading provider of real time monitoring systems and data management services for the leisure and forecourt services sectors, provides the following H2 trading update in advance of its financial year ending 31 March 2011, the results of which will be announced on 7 June 2011. 

Trading performance

Despite good progress with i-draught™, Vianet and the Fuel Solutions division, the Group's trading for H2 is likely to be lower than anticipated resulting in the full year profits expected to be around £4.0 million*. However, the Board anticipates maintaining its progressive dividend policy given the Group's continuing positive cash generation from its core business.

The Group has experienced a continuation of the well-documented economic conditions and commercial pressures affecting some core leisure customers, resulting in pub sell-offs and delayed commitment to new activity. At the same time, customers have delayed committing to projects for a number of reasons, including waiting for what were positive results from Brulines' NMO testing, waiting for increased clarity on the BISC pub industry enquiry, and carrying out extensive evaluation of i-draught™ as a replacement for standard Dispense Monitoring Services.

In addition, the severe weather conditions caused travel disruption to compound the usually lower activity for the Group's field-based services in December 2010 and January 2011 and, taken together, these factors have impacted the Group's outcome for the year.

A two pronged strategy to continue to reduce costs and drive sales, particularly of the Group's newer products, has begun to mitigate the position. However, the benefits of these actions will only be fully realised in the coming financial year.

Business developments

Whilst trading in the core beer monitoring business remains challenging, the progress on Brulines' key products has been encouraging and the Group is confident that this will drive a return to growth in the coming year.

The re-launch of i-draught™, which now accounts for seven percent of the Group's installation base, has been received very positively by customers, and increased penetration is being achieved across the on premise draught beer market.

The losses associated with Vianet have been reduced and there has been excellent progress in developing significant new sales opportunities for the Group's vending telemetry, including trial of the Group's cashless and contactless solutions with major international companies.

The Group's recent acquisitions in the forecourt services market have been successfully integrated, and the fuel solutions division now has a fully integrated, one stop service solution, and information toolbox for forecourt operators. Customer reaction from major supermarkets through to leading independent forecourt operators has been very encouraging and underpins the Group's decision to replicate in the forecourt market, the Group's success in the leisure sector.

The very recent Amscreen M2M acquisition is extremely complementary as it strengthens the leading edge technology the Group has in relation to the services it provides for its i-draught™, fuel and vending telemetry solutions, whilst also providing horizontal market opportunities for our telemetry solutions. The acquisition will also improve procurement and reduce the time to market, as the Group seeks to achieve globally scalable penetration in its markets. 

Outlook

As disclosed at the Interim Results last December, the Board fully expects the difficult economic environment and current challenging trading conditions to continue for some time yet. However, the future growth prospects across both the Group's divisions are encouraging and the Board continues to view the medium term future with considerable confidence. Despite the reduction in H2 profits, the Board anticipates maintaining its progressive dividend policy given the Group's continuing positive cash generation from its core business.

An analyst briefing on the full year results to be given by James Dickson, Chief Executive, and Mark Foster, Finance Director, will be held at 9.30 am on Tuesday, 7 June 2011 at Abchurch Communications, 125 Old Broad Street, London, EC2N 1AR. 

* Operating profit before intangible amortisation, share based payments, and exceptional costs 

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About Brulines

Brulines Group is focused on the provision of real time monitoring systems and data management services for the UK's leisure and petrol forecourt sectors. Since its admission to AIM in 2006, the Group has grown both organically and through a series of strategic acquisitions to give the Group access to key vertical markets. The Group operates two divisions which comprise five key products:

LEISURE DIVISION

FUEL SOLUTIONS DIVISION

Headquartered in Stockton-on-Tees, Brulines employs more than 240 people. 

For further information, please visit www.brulines.com