Vianet Group - 1HFY24 results - As expected, 2HFY24 stronger
Vianet has published interim results to 30 September, reporting adjusted pre-tax profit of £29k (1HFY23 loss of £107k), excluding BMI post-acquisition costs. The results were in line with management's expectations while guidance that the results are on track to meet expectations for the full year was reiterated. That implies a stronger 2HFY24, aided by further contract wins and a pick up in business, particularly as the switch over from 3G to 4G gathers pace. The balance sheet was strengthened with net debt falling to £2.1m (£3.4m at YEFY23) benefitting from the receipt of a £0.9m tax rebate and higher operating cash generation. No interim dividend was declared but management indicated that there would be a FY24 final dividend. Vianet's share price has responded positively to the trading statement which previewed this performance. Even so, on our unchanged forecasts for EPS we continue to expect that Vianet should approach FY20 levels of pre-tax profit by FY25 when it would be trading on an undemanding sub-13x P/E.Vianet Group is a provider of actionable management information and business insight created through combining data from its smart Internet of Things solutions and external information sources. Co. operates two business divisions: Smart Zones, which principally consists of beer monitoring business (including the U.S.) and gaming machine management services; and Smart Machines, which comprises vending machine telemetry and contactless payment solutions, as well as monitoring business primarily in the vending sector. Co. provides design, product development, sale and rental of fluid monitoring equipment and machine monitoring equipment, data insights and related services in these divisions.
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