North East Internet of Things company Vianet is set to report increased profits by the end of its financial year, though it is now implementing a detailed response to the coronavirus outbreak.
The Stockton company specialises in fitting monitoring devices to machinery such as vending machines and beer pumps.
With many of its customers in the pub and restaurant trade, the company said the outbreak would have a “material effect” on its activities, though it had seen increased activity on vending machines it operates in hospitals and similar venues.
The group said it was “well equipped” to cope with the slowdown affecting companies around the UK and was focussed on protecting its staff.
The update came as the firm reported that trading in the second half of its financial year had been largely as anticipated and it was on track to report profits of £4m for the year ending March 31, up from £3.85m a year earlier.
The company said: “The mandatory closures of pubs, bars and restaurants in the UK will have a material effect on almost all our Smart Zones customers.
“In anticipation of this, we had therefore proposed a reduced rate on all our contracts in order to maintain business continuity and to avoid more expensive reconnection costs for customers when pubs reopen. We are encouraged by our customers' responses and expect to be able to protect a meaningful portion of the group's recurring revenue during this period of pub closures.
“It is too early to predict the overall impact of COVID-19 on our Smart Machines business as we have seen mixed trading impacts across the range of our customers.
“Some vending machines, including those in hospitals, supply chains and emergency services are trading very well, whereas those in closed city centre offices have experienced little or no sales.
“As with Smart Zones customers, we are providing impacted Smart Machines customers with the option of a reduced weekly charge in closed sites. Positively, we are seeing increased demand and usage of our contactless payment solution rather than 'dirty' coins.”
Vianet said it had taken action to reduce all non-essential costs and would be taking advantage of the full range of Government support linked to the coronavirus outbreak.
The company has decided to withdraw a recommendation to pay a shareholder dividend which would have cost it £1.6m, though it said it would review that decision later when the full impact of the outbreak became clearer.
The company statement said: “The board's absolute focus is on ensuring that Vianet comes through this global crisis in a position to continue to take advantage of its exciting growth opportunities.
“In the meantime, the board's priority is maintaining the health, wellbeing and safety of our employees and customers.”
