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Vianet hit by tough conditions

Friday 22 February 2013 7:00

Data monitoring group Vianet has downgraded its expectations for the year amid contract delays, pressure in the leisure sector and increased investment in the US.

The Stockton company, which monitors beer in pubs, petrol on forecourts and vending machine activity, said operating profit in the year to the end of March will be below expectations – “not less than £3.2m” compared to £3.9m in 2012.

In its core beer monitoring business a strong H1 has not been replicated in the second half of the year, with delays to several anticipated installation programmes for its DraughtTM technology and the impact of increasing pub disposals.

Chief executive James Dickson said: "It is obviously disappointing to be downgrading expectations. We have made good progress in a number of areas but have not been able to offset the effect of contract delays.

“The investment made in the US and recent contract wins in the UK means that the outlook for 2014 remains promising.  The actions taken to reduce costs, particularly in the Fuel Solutions business, are also now coming through and further cost reduction initiatives are being implemented across the group.

“It is against this backdrop and the continued strong cash generation that the Board expects to maintain the dividend."

In the US, Vianet says it has now established a high calibre team and formed a strategic alliance with Micro Matic USA for nationwide iDraught installation, service and sales support.

Following several months of set-up activity, the full US launch started earlier this month with initial installations across ten states with several North American retail chains, controlling over 2,000 bars.

It is anticipated that a loss of £0.4m will be recorded compared to the small profit originally expected with the Colorado-only business, reflecting the start-up costs of the "enlarged opportunity".