Technology group Vianet Group has scrapped plans to pay out a dividend to shareholders amid uncertainty created by the Covid-19 crisis.
The Stockton business, which provides systems and services to the leisure and vending sectors, announced its decision to withdraw the final dividend as it announced full year results for the year ended March 31 2020, in which it saw a 10% fall in pre-tax profit despite seeing rising revenues.
The firm said pre-tax profit for the year fell from £2.66m to £2.4m, while revenue increased 3.8% to £16.28m.
Adjusted operating profit meanwhile, before exceptional costs, amortisation and share based payments rose 4.5% to £4.03m.
Directors said recurring revenues remain strong at 92%, only slightly down on the 94% recorded last year, thanks to the growth in people making contactless payments.
The withdrawal of the final dividend saves the company around £1.16m.
Highlights for the year included a number of notable contract renewals as well as three significant new three to five year contracts with leading vending operators, which will generate around £10m of revenue over the contract terms.
James Dickson, chairman of Vianet Group said that operationally, both the firms divisions – Smart Machines and Smart Zones – performed well.
He said: “Despite continued pub disposals in the UK, our Smart Zones division maintained its profit contribution, helped by our Tech Refresh programmes, and we are delighted to note several key contract renewals, including Charles Wells, Greene King, Hawthorn, Hydes, JW Lees, and Punch.
“Having already received orders and enquiries for installations of new systems as we look to pubs reopening, we believe Smart Zones are well positioned to navigate the Covid-19 exit and recover strongly.
“From the very outset of the pandemic, our goal has been to preserve cash to ensure both business continuity and to enable ongoing investment in the business, with the aim of being strongly positioned for the COVID-19 exit phase.
“Whilst these are still early days, we are encouraged that April’s trading performance was well ahead of our revised forecasts, and that the measures we have taken to protect the business have been successful, giving us confidence that we are well positioned to exit from the Covid-19 phase with momentum to accelerate our growth plans.”
Shares in Vianet rose 12% in early trading following publication of its results.
