VIANET GROUP PLC

Earnings Release • Dec 7, 2021

National Storage Mechanism | Additional information

RNS Number : 7477U

Vianet Group PLC

07 December 2021

7 December 2021

Vianet Group plc

("Vianet", "Company" or "the Group")

Interim Results

Vianet Group plc (AIM: VNET), the international provider of internet enabled, cloud based, telemetric services to the hospitality, unattended retail vending, and remote asset management sectors, is pleased to announce its unaudited results for the six months ended 30 September 2021.

Our Smart Zones division provides unique quality assurance, business intelligence and waste management services to the drinks retailing industry.

Our Smart Machines division provides innovative real-time monitoring, business intelligence and data insights for unattended vending machines maximising operational efficiency, stock control and cash flow whilst reducing our customers' carbon footprint.

The Group has seen a strong recovery in our Smart Zones division, aligned to the re-opening of pubs through Q2 2022, together with good growth in both new business and unit sales in our Smart Machines division. This has resulted in a good H1 2022 performance, improving the quality of our strong recurring revenue base.  Vianet has also made progress towards commercialising data capture in other verticals, which will provide the Group with a further growth engine.

H1 2022 has provided real momentum into H2 2022, and subject to global semiconductor chip supply chain and Covid-19 pressures, we expect to achieve FY2022 market expectations of £2.2 million of adjusted operating profit(a) and being back at pre-pandemic levels of trading in FY2023.

Financial highlights

●	Revenue of £6.34 million (H1 2021: £4.07 million, H1 2020: £8.41 million)
●	Recurring revenues at 83% (H1 2021: 87%, H1 2020: 82%). H1 2021 proportion of recurring increased due to reduction in hardware sales during hospitality lockdowns
●	Adjusted operating profit(a) of £0.82 million (H1 2021: adjusted operating loss(a) of £0.38 million, H1 2020: adjusted operating profit £2.00 million)
●	EBITDA(b) £0.99 million (H1 2021: £0.26 million loss, H1 2020: £2.33 million)
●	Operational cash generation, post working capital, was £1.40 million (H1 2021: £1.19 million, H1 2020: £2.44 million)
●	Basic loss per share at 1.15p (H1 2021: basic loss per share at 4.86p, H1 2020: basic profit per share 6.00p)
●	Net debt increased to £2.52 million (H1 2021: £1.15 million, H1 2020: £1.18 million) due to a combination of investment in a new sales and marketing team, continued product development, together with substantially reduced customer billing during lockdown in Q1 2022 and component premiums of over £200k in the period
●	Maintaining a prudent approach, the Board will not declare an interim dividend for the current financial year (H1 2021: nil, H1 2020: 1.70p)

Divisional highlights

●	Smart Machines new unit sales at 5,990 (H1 2021: 3,212 units) with estate increasing c. 12% to c.  42,400 units
●	New contactless payment device sales at 5,410 units (H1 2021: 2,152 units)
●	Smart Machines adjusted operating profit(a) at £0.71 million (H1 2021: £0.55 million, H1 2020: £0.78 million)
●	Investment in Smart Machines sales and commercial team is driving customer engagement with 22 new contracts and 5 renewals on 3-5-year terms
●	Smart Zones adjusted operating profit(a) at £1.31 million (H1 2021: £0.13 million, H1 2020: £2.32 million)
●	Smart Zones estate re-openings at 98% and now on full billing
●	Smart Zones had three long term contract renewals, including Stonegate and two new data contracts facilitated by Oxford Partnership

(a) Adjusted operating profit is profit before exceptional costs, amortisation, interest and share-based payments

(b) EBIDTA is earnings before interest, tax, depreciation, and amortisation

Commenting, James Dickson, Chairman and Interim Chief Executive Officer of Vianet Group plc, said:

"The first half has seen a return to operating profit with positive momentum in the second quarter going into H2.  

"Whilst we are not immune to the global supply chain and Covid-19 pressures, our H1 2022 results provide real momentum into H2 2022, with a clear line of sight towards meeting FY2022 market estimates of £2.2 million and giving rise to the Group's return to pre-pandemic levels of trading during early FY2023.

"The Group has been laying the foundations for growth and now has a strong pipeline of opportunities in several verticals where our data capture will allow customers to increase sales, improve efficiency and reduce their carbon footprint."   

- Ends -

An analyst briefing given by James Dickson, Chairman and Interim Chief Executive Officer, and Mark Foster, Chief Financial Officer will be held today at 09.30hrs at Cenkos, 6-8 Tokenhouse Yard, London EC2R 7AS or online via Microsoft Teams. Please contact vianet@yellowjerseypr.com for details.

Enquiries:

Vianet Group plc
James Dickson, Chairman and Interim CEO Mark Foster, CFO	Tel: +44 (0) 1642 358 800 www.vianetplc.com
Cenkos Securities plc
Stephen Keys / Camilla Hume	Tel: +44 (0) 20 7397 8900 www.cenkos.com

Media enquiries:

Yellow Jersey PR
Sarah Hollins Henry Wilkinson   vianet@yellowjerseypr.com	Tel: +44 (0)7764 947 137          Tel: +44 (0)7951 402 336 www.yellowjerseypr.com

Chairman and Interim Chief Executive Officer's Statement

Last year I provided a comprehensive update on our proactive response to the Coronavirus ("C19") pandemic. This year the emphasis has shifted to the strength of our recovery and the clear sales and commercial momentum we have going into H2 2022, which I expect will see the Group back to pre-pandemic performance levels early in FY2023.  

Strong Q2 recovery resulted in an adjusted operating profit of £0.82 million. Together with the strong momentum going into H2 this gives us confidence that FY2022 market expectations of c. £2.2 million of adjusted operating profit will be achieved and that the Group will be back to pre-pandemic levels during early FY2023.

Whilst it has been challenging dealing with the uncertainty around the pace of hospitality sector and city centre office re-openings, I am delighted to report that the Group's performance continues to recover well. We are not immune to any reintroduction of Covid-19 restrictions, the global semi-conductor shortages and associated stock premium costs, or upwards inflationary pressure, but we are confident that momentum and sales will continue to grow.

Performance

The focus has been on cash management, customer engagement, continued investment in sales, and technology as we migrate to a fully cloud-native environment to support growth. This is allowing us to build momentum and accelerate our Smart Machines growth plans whilst developing Smart Zones contribution at the same time as commercialising data opportunities in new verticals.

Comparison is given against H1 2021 and H1 2020 to provide better context to our solid recovery.

Despite Covid-19 restrictions in Q1, turnover was at £6.34 million (H1 2021: £4.07 million, H1 2020: £8.41 million) being 75% of pre-pandemic performance levels.

The Group's adjusted operating profit was £0.82 million (H1 2021: £0.38 million loss, H1 2020: £2.00 million profit), representing over 40% of pre-pandemic performance.

Operating profit post exceptional items was £0.78 million (H1 2021: £0.52 million loss, H1 2020: £2.59 million profit). H1 2020 had a net £0.59 million exceptional credit, which included a £0.92 million deferred consideration release. The pre-tax loss was £0.36 million (H1 2021: £1.44 million loss, H1 2020: £1.77 million profit).

The Group's loss per share was 1.15 pence (H1 2021: loss 4.86 pence and H1 2020: earnings 6.00 pence).

New telemetry and contactless payment device sales helped our Smart Machines division to an adjusted operating profit of £0.71 million (H1 2021: £0.55 million, H1 2020: £0.78 million), representing over 90% of pre-pandemic performance. During H1 2022, the new sales team delivered over 25 new and re-signed contracts with increasing traction coming into H2.

Although Q1 was challenging due to the hospitality sector restrictions, Smart Zones division adjusted operating profit recovered to £1.31 million (H1 2021: £0.13 million, H1 2020: £2.32 million). The strong recovery in Q2 was helped by the strength of recurring income from long-term contracts in the active UK and Europe estate of c. 10,400 (FY2021: 10,800).  During the period, there was a net reduction of around 400 active sites, however some of these closures may be sites that are yet to re-open, especially in some city centres.

The growing demand for data and market insights is driving increased sales in our core hospitality and un-attended retail sectors. It is also allowing the Group to commercialise exciting growth opportunities in other sectors such as catering and forecourt solutions.

Dividend

While the Group's recovery is assured, Vianet is not immune from global supply issues or further Covid-19 restrictions impacting our markets. As such, we remain focused on managing our cash balances to fund working capital and invest in growth. As a result, the Board will remain prudent and refrain from re-introducing an interim dividend for H1 2022. However, subject to no further lockdowns or restrictions on the hospitality sector and no deterioration of semi-conductor supply, we expect H2 cash generation will enable the Board to reinstate a dividend in July for FY2022.

Outlook

The bounce-back experienced in Q2 2022 has continued to develop momentum into H2 2022, which should result in the Group meeting current market guidance for the full year.

Barring any further draconian restrictions on the hospitality sector or significant deterioration in global microchip supplies, the business is well placed to get back to pre-pandemic performance levels in early FY2023. 

As a result of working closely with our customers and suppliers, intelligent cash management, and uninterrupted investment, the Group is in a strong position to take advantage of the clear opportunities in remote asset management, contactless payment, and market data insights in our existing and new sectors.

·    Smart Machines will continue to accelerate growth from the significant pipeline of opportunities in the UK and Europe from both existing and new customers. We have the leading end to end solutions for un-attended retail together with a highly motivated sales and commercial team who have real momentum. The H1 new business gains resulted in 22 customers being onboarded, which alone will result in significant new device sales in H2.

·    Smart Zones has a healthy pipeline, including several major technology upgrade programmes, and will continue to recover through H2 2022 as new installation programmes are realised. Our investment in data insight and relationship with Oxford Partnership is allowing the Group to develop new revenue opportunities in hospitality which are expected to gain momentum through H2 into FY2023.

·    Following successful field trials, using the Group's existing technologies, and commercial negotiations, we should see progress in establishing new growth in sectors such as environmental, catering, forecourts, and tank monitoring.

We are not immune from some of the well-publicised global supply chain challenges, but our high levels of contracted recurring revenue will continue to support our recovery and cash generation capability. Whilst Covid-19 and Brexit related challenges may endure for some time, our ongoing investment in product and people is creating real momentum, and I am confident that the Group has the team and financial wherewithal to drive growth for a sustained period, as the demand for both data and contactless solutions grows.  

The Board remains confident that momentum and sales will continue to grow as we execute our long-term growth strategy and deliver earnings growth as the world recovers from the pandemic.

James Dickson                                                                                 

Chairman and Interim Chief Executive Officer                                                                    

7 December 2021

Chief Financial Officer's Review

Our strategy of delivering insight and analytics by connecting customers to their assets has been revalidated. Our customers are increasingly relying on the data we provide to help them navigate the pandemic. Smart Zones provides critical trading information for our hospitality customers, enabling senior level decision-making on business support and re-opening plans. This has led to further contracts and accelerated renewals.

Growth in contactless payments is driven by the perception of 'dirty cash' and the gradual trend towards phasing out of notes and coins. This is accelerating the strategic move to contactless solutions. With the recent increase in the contactless limit to £100 per transaction, we have seen further growth in units and net estate size with the installation of contactless payment devices in unattended retail machines. For many, this is being viewed as critical to business survival.

Operational cash generation, post working capital, was £1.40 million (H1 2021: £1.19 million, H1 2020: £2.44 million) being c. 57% of pre-pandemic performance. Q1 endured hospitality restrictions whilst Q2 was impacted by microchip stock premiums and inflationary costs. The cash position was helped by close management of our costs and continuing payments from our customers. Despite some of the broader economic challenges, we are confident that our cash trajectory is robust and adequately supports our business needs.

Exceptional costs amounted to £0.04 million (H1 2021: £0.14 million and H1 2020 was an exceptional credit of £0.58 million resulting from a deferred consideration release of £0.92 million).

The Group had an overall net debt position of £2.52 million at the half-year, compared to £1.15 million last year (H1 2020: £1.18 million), with gross debt of £4.45 million (H1 2021: £4.87 million, H1 2020: £3.02 million) taking account of the CBIL facility.  The net debt increase was primarily due to investment in our new sales and marketing team, maintaining product development spend through the pandemic and the introduction of significant one-off discounts to help our customers during the pandemic restrictions.

Smart Machines

Smart Machines sales of new telemetry and contactless device connections continued, with overall sales of 5,990 units (H1 2021: 3,212 units, H1 2020: 7,634 units) with contactless payment sales of 5,410 units (H1 2021: 2,152 units, H1 2020: 4,796 units) being ahead of our pre-pandemic performance. The sales performance was very encouraging, especially given the slower recovery in UK offices and the brands and manufacturing sectors.  

Turnover was £2.63 million (H1 2021: £2.04 million, H1 2020: £2.71 million), representing c. 97% of pre-pandemic performance. Although two-thirds of new hardware sales were capital purchases, the recurring revenue remained strong at just over 70% (H1 2021: c. 82%, H1 2020: just under 70%). The H1 2021 sales mix was impacted by a significant reduction in both hardware and development recharges due to the first lockdown. 

During the period, industry recognition that contactless payment adoption will accelerate, and operating overheads needed to be reduced by visiting sites less frequently led us to sign 22 new contracts and 5 renewal contracts.

Momentum into H2 2022 has been encouraging as the sales team is starting to deliver on the new business pipeline we have identified. We are confident that the Smart Machines growth opportunity has been enhanced due to changing behaviour arising from the pandemic. Barring any further unforeseen national initiatives, the underlying opportunity remains strong, and we are confident it will enhance our future earnings growth.

Smart Zones

The underlying performance of the Group's core beer monitoring business was significantly impacted during the various national lockdowns over the last 18 months but has recovered strongly.

Turnover of £3.72 million (H1 2021: £2.03 million, H1 2020: £5.70 million) was c. 65% of pre-pandemic levels largely due to the hospitality restrictions and temporary discounts for customers in Q1. 

Recurring revenue remained strong at over 90%. Similar to the levels achieved in H1 2021 and marginally higher than the c. 87% we delivered H1 2020.

Pre-exceptional profit of £1.31 million (H1 2021: £0.13 million, H1 2020: £2.32 million) represents c. 56% of our pre-pandemic performance.

In the period, we successfully delivered several key contract renewals. Most notably, the Group signed long-term contract renewals with EIG/Stonegate and with the Oxford Partnership for data insights.  

There were 151 new system installations in H1 2022, compared to 41 in H1 2021. In addition, there were almost 500 system upgrades compared to around 140 in H1 2021.

Customers have embraced our trading performance insights and data analytics throughout the last 18 months. The Group's continued investment in new technology and the migration of data and services to the cloud has significantly increased the opportunities we see ahead in our Smart Zones division.

In the US, the impact of lockdown has significantly impacted the hospitality industry for our key customers and prospects. New sales stalled, which coupled with the support package we provided to customers, led to our US business suffering a £0.03 million loss in the period (H1 2021 £0.16 million loss and H1 2020: £0.01 million profit). As with all cinema chains, our largest US customer, AMC Theatres, has been affected by Covid-19 closures and remains seriously challenged despite their re-financing. Inevitably this will impact our H2 performance in the USA, but we remain confident in pursuing other avenues of opportunity in this large and exciting market.

Looking Forward

Our principal aim during the period has always been to come through the pandemic in the best possible shape and with the critical business growth drivers enhanced.

Whilst the impact of the pandemic may not yet be over, there has been a significant positive shift in customer behaviour, and we are confident of delivering both FY2022 market expectations and strong growth over the life of our three-year plan.

Mark Foster Chief Financial Officer
7 December 2021

Consolidated Statement of Comprehensive Income

For the six months ended 30 September 2021

		Before Exceptional 6 months	Exceptional 6 months	Total Unaudited 6 months	Before Exceptional 6 months	Exceptional 6 months	Unaudited 6 months	Audited Year
		Ended	Ended	Ended	Ended	Ended	Ended	Ended
		30 Sept	30 Sept	30 Sept	30 Sept	30 Sept	30 Sept	31 March
		2021	2021	2021	2020	2020	2020	2021
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations
Revenue	3	6,340	-	6,340	4,066	-	4,066	8,369
Cost of sales		(2,306)	-	(2,306)	(1,497)	-	(1,497)	(3,307)
Gross profit		4,034	-	4,034	2,569	-	2,569	5,062
Administration and other operating expenses	4	(3,215)	(38)	(3,253)	(2,946)	(142)	(3,088)	(6,092)
Operating profit/(loss) pre amortisation and share based payments	3	819	(38)	781	(377)	(142)	(519)	(1,030)
Intangible asset amortisation		(1,050)	-	(1,050)	(837)	-	(837)	(1,669)
Share based payments		(35)	-	(35)	(48)	-	(48)	(73)
Operating loss post amortisation and share based payments		(266)	(38)	(304)	(1,262)	(142)	(1,404)	(2,772)
Net finance costs		(59)	-	(59)	(32)	-	(32)	(50)
Loss from continuing operations before tax		(325)	(38)	(363)	(1,294)	(142)	(1,436)	(2,822)
Income tax credit	5	30	-	30	30	-	30	867
Loss and other comprehensive income for the year	3	(295)	(38)	(333)	(1,264)	(142)	(1,406)	(1,955)
Loss per share
Continuing Operations
- Basic	6			(1.15p)			(4.86p)	(6,75)p
- Diluted	6			(1.15p)			(4.83p)	(6.75)p

Consolidated Balance Sheet

At 30 September 2021

		Unaudited As at 30 Sept 2021	Unaudited As at 30 Sept  2020	Audited As at 31 March 2021
		£'000	£'000	£'000
Assets
Non-current assets
Intangible assets		23,956	23,708	24,040
Property, plant and equipment		3,290	3,610	3,391
Deferred Tax asset		265	510	236
Total non-current assets		27,511	27,828	27,667
Current assets
Inventories		1,530	1,519	1,431
Trade and other receivables		2,692	2,509	2,758
Cash and cash equivalents		1,932	3,721	1,894
		6,154	7,749	6,083
Total assets		33,665	35,577	33,750
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables		3,593	3,098	3,257
Borrowings		1,741	1,466	1,265
Leases		35	34	53
		5,369	4,598	4,575
Non-current liabilities
Other payables		86	117	86
Borrowings		2,707	3,408	3,290
Deferred tax		-	1,111	-
Leases		-	20	-
		2,793	4,656	3,376
Equity attributable to owners of the parent
Share capital		2,895	2,895	2,895
Share premium account		11,711	11,709	11,709
Share based payment reserve		472	412	437
Merger reserve		310	310	310
Retained profit		10,115	10,997	10,448
Total equity		25,503	26,323	25,799
Total equity and liabilities		33,665	35,577	33,750

Summarised Consolidated Cash Flow Statement

For the six months ended 30 September 2021

		Unaudited 6 months	Unaudited 6 months	Audited Year
		Ended	Ended	Ended
		30 Sept	30 Sept	31 March
		2021	2020	2021
		£'000	£'000	£'000
Cash flows from operating activities
Loss for the period		(333)	(1,406)	(1,955)
Adjustments for
Net Interest payable		59	32	50
Income tax credit		(30)	(30)	(867)
Amortisation of intangible assets		1,050	837	1,669
Depreciation		244	309	563
Loss on sale of property, plant and equipment		67	7	126
Share-based payments expense		35	48	73
Operating profit/(loss) before changes in working capital and provisions		1,092	(203)	(341)
Change in inventories		(97)	(28)	60
Change in receivables		66	1,035	786
Change in payables		337	389	547
		306	1,396	1,393
Net cash from operating activities		1,398	1,193	1,052
Cash flows from investing activities
Purchases of property, plant and equipment		(211)	(131)	(268)
Purchase of intangible assets		(966)	(1,185)	(2,348)
Net cash used in investing activities		(1,177)	(1,316)	(2,616)
Cash flows from financing activities
Net Interest payable		(59)	(32)	(50)
Issue of share capital		2	-	-
Repayment of leases		(18)	(45)	(64)
Repayments of borrowings		(606)	-	(319)
New borrowings		-	3,540	3,540
Payment of deferred consideration		-	-	(31)
Net cash (used in)/from financing activities		(681)	3,463	3,076
Net (decrease)/increase in cash and cash equivalents		(460)	3,340	1,512
Cash and cash equivalents at beginning of period		1,893	381	381
Cash and cash equivalents at end of period		1,433	3,721	1,893
Reconciliation to the cash balance in the Consolidated Balance Sheet
Cash balance as per consolidated balance sheet		1,932	3,721	1,893
Bank overdrafts		(499)	-	-
Balance per statement of cash flows		1,433	3,721	1,893

Statement of changes in equity

Six months ended 30 September 2021

	Share capital	Share premium account	Share based payment reserve	Merger reserve	Retained profit	Total
	£000	£000	£000	£000	£000	£000
At 1 April 2021	2,895	11,709	437	310	10,448	25,799
Share based payment	-	-	35	-	-	35
Issue of share capital	-	2	-	-	-	2
Transactions with owners	-	2	35	-	-	37
Loss and total comprehensive income for the period	-	-	-	-	(333)	(333)
Total comprehensive income less owners transactions	-	2	35	-	(333)	(296)
At 30 September 2021	2,895	11,711	472	310	10,115	25,503

Six months ended 30 September 2020

	Share capital	Share premium account	Share based payment reserve	Merger reserve	Retained profit	Total
	£000	£000	£000	£000	£000	£000
At 1 April 2020	2,895	11,709	364	310	12,403	27,681
Share based payment	-	-	48	-	-	48
Transactions with owners	-	-	48	-	-	48
Loss and total comprehensive income for the period	-	-	-	-	(1,406)	(1,406)
Total comprehensive income less owners transactions	-	-	48	-	(1,406)	(1,358)
At 30 September 2020	2,895	11,709	412	310	10,997	26,323

12 months ended 31 March 2021

	Share capital	Share premium account	Share based payment reserve	Merger reserve	Retained profit	Total
	£000	£000	£000	£000	£000	£000
At 1 April 2020	2,895	11,709	364	310	12,403	27,681
Share based payment	-	-	73	-	-	73
Transactions with owners	-	-	73	-	-	73
Loss and total comprehensive income for the year	-	-	-	-	(1,955)	(1,955)
Total comprehensive income less owners transactions	-	-	73	-	(1,955)	(1,882)
At 31 March 2021	2,895	11,709	437	310	10,448	25,799

Notes to the interim report

1.            Statutory information

The interim financial statements are neither audited nor reviewed and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The financial information for the year ended 31 March 2021 has been derived from the published statutory accounts. A copy of the full accounts for that period, on which the auditor issued an unmodified report that did not contain statements under 498(2) or (3) of the Companies Act 2006, has been delivered to the Registrar of Companies.

These interim financial statements will be posted to all shareholders and are available from the registered office at One Surtees Way, Surtees Business Park, Stockton on Tees, TS18 3HR or from our website at www.vianetplc.com/investors.

2.            Accounting policies

The interim financial statements have been prepared in accordance with the AIM Rules for Companies and on a basis consistent with the accounting policies and methods of computation as published by the Group in its Annual Report for the year ended 31 March 2021, which is available on the Group's website.

The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements and therefore the Interim financial information is not in full compliance with International Financial Reporting Standards.

Having considered current trading performance, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Financial forecasts and projections, taking account of reasonably possible changes and sensitivities in future trading performance and the market value of the Group's assets, have been prepared and show that the Group is expected to be able to operate within the level of cash and the available headroom on the current banking facility.

The Directors are confident that the Company will be able to meet its liabilities as they fall due over the next 12 months. As a result, this financial information has been prepared on a going concern basis.

3.            Segmental information

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. The segment operating results are regularly reviewed by the Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance. Vianet Group is analysed into to two trading segments (defined below) being Smart Zones (mainly adopted in the leisure sector, including US (particularly in pubs and bars) and Smart Machines (mainly adopted in the vending sector (particularly in unattended retail vending machines) supported by Corporate/Technology & stores costs.

The products/services offered by each operating segment are:

·    Smart Zones: Data insight & actionable data services, design, product development, sale and rental of fluid monitoring equipment.

·    Smart Machines: Data insight & actionable data services, design product development, sale and rental of machine monitoring and contactless payment equipment and services.

·    Corporate/Technology: Centralised Group overheads along with technology and stores related costs for the Group.

The inter-segment sales are immaterial. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated assets and liabilities comprise items such as cash and cash equivalents, certain intangible assets, taxation, and borrowings. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one period.

The segmental results for the six months ended 30 September 2021 are as follows:

Continuing Operations			Smart Zones	Smart Machines	Corporate/Technology	Total
			£'000	£'000	£'000	£'000
Total revenue			3,715	2,625	-	6,340
Profit/(loss) before amortisation, share based payments and exceptional costs			1,314	714	(1,209)	819
Pre-exceptional segment result			1,008	601	(1,875)	(266)
Exceptional costs			(3)	(22)	(13)	(38)
Post exceptional segment result			1,005	579	(1,888)	(304)
Finance income			-	-	-	-
Finance costs			(53)	(6)	-	(59)
Profit/(loss) before taxation			952	573	(1,888)	(363)
Taxation						30
Loss for the year from continuing operations						(333)

			Smart Zones	Smart Machines	Corporate/Technology	Total
			£'000	£'000	£'000	£'000
Segment assets			27,403	4,083	1,914	33,400
Unallocated assets			-	-	265	265
Total assets			27,403	4,083	2,179	33,665
Segment liabilities			7,897	-	265	8,162
Unallocated assets			-	-	-	-
Total liabilities			7,897	-	265	8,162

Notes to the interim report (continued)

The segmental results for the six months ended 30 September 2020 are as follows:

Continuing Operations			Smart Zones	Smart Machines	Corporate/Technology	Total
			£'000	£'000	£'000	£'000
Total revenue			2,025	2,041	-	4,066
Profit/(loss) before amortisation, share based payments and exceptional costs			132	550	(1,059)	(377)
Pre-exceptional segment result			(76)	430	(1,616)	(1,262)
Exceptional costs			(12)	(39)	(91)	(142)
Post exceptional segment result			(88)	391	(1,707)	(1,404)
Finance income			-	-	1	1
Finance costs			(19)	(14)	-	(33)
(Loss)/profit before taxation			(107)	377	(1,706)	(1,436)
Taxation						30
Loss for the year from continuing operations						(1,406)

			Smart Zones	Smart Machines	Corporate/Technology	Total
			£'000	£'000	£'000	£'000
Segment assets			29,089	4,083	1,895	35,067
Unallocated assets			-	-	510	510
Total assets			29,089	4,083	2,405	35,577
Segment liabilities			7,780	-	363	8,143
Unallocated assets			-	-	1,111	1,111
Total liabilities			7,780	-	1,474	9,254

Notes to the interim report (continued)

The segmental results for the 12 months ended 31 March 2021 are as follows:

Continuing Operations			Smart Zones	Smart Machines	Corporate/ Technology	Total
			£'000	£'000	£'000	£'000
Total revenue			3,953	4,416	-	8,369
Profit/(loss) before amortisation, share based payments and exceptional costs			503	1,102	(2,292)	(687)
Pre-exceptional segment result			85	858	(3,372)	(2,429)
Exceptional costs			(81)	(147)	(115)	(343)
Post exceptional segment result			4	711	(3,487)	(2,772)
Finance income			-	-	1	1
Finance costs			(28)	(23)	-	(51)
Profit/(loss) before taxation			(24)	688	(3,486)	(2,822)
Taxation						867
Profit for the year from continuing operations						(1,955)

			Smart Zones	Smart Machines	Corporate/ Technology	Total
			£'000	£'000	£'000	£'000
Segment assets			27,534	4,083	1,897	33,514
Unallocated assets			-	-	236	236
Total assets			27,534	4,083	2,133	33,750
Segment liabilities			7,466	-	485	7,951
Unallocated assets			-	-	-	-
Total liabilities			7,466	-	485	7,951

Notes to the interim report (continued)

4.            Exceptional items

		6 months	6 months	Year
		Ended	Ended	Ended
		30 Sept	30 Sept	31 March
		2021	2020	2021
		£'000	£'000	£'000
Corporate restructuring and transitional costs		23	59	154
Disposal costs		-	-	101
Network Obsolescence costs		1	-	8
Other		14	83	80
		38	142	343

Corporate restructuring and transitional costs relate to the transition of people and management to ensure we have the succession and calibre of people on board to deliver the strategic aims and aspirations of the Group.

5.            Tax

The credit for tax is based on the loss for the period and comprises:

		6 months	6 months	Year
		Ended	Ended	Ended
		30 Sept	30 Sept	31 March
		2021	2020	2021
		£'000	£'000	£'000
United Kingdom corporation tax		30	30	867

The tax credit reflects the utilisation of brought forward trading losses, which had previously been recognised as a deferred tax asset, against the taxable profit for the period within Vianet Limited.

6.            Loss per share 

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders (loss of £333k) by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share are calculated on the basis of loss for the year after tax divided by the weighted average number of shares in issue in the year plus the weighted average number of shares which would be issued if all the options granted were exercised.

The table below shows the earnings per share result.

	30 September 2021			30 September 2020
	(Loss) £000	Basic (loss) per share	Diluted (loss) per share	Earnings £000	Basic earnings per share	Diluted earnings per share
Post-tax loss attributable to equity shareholders	(333)	(1.15p)	(1.15p)	(1,406)	(4.86p)	(4.83p)

	30 Sept 2021 Number	30 Sept 2020 Number
Weighted average number of ordinary shares	28,953,818	28,953,414
Dilutive effect of share options	-	172,967
Diluted weighted average number of ordinary shares	28,953,818	29,126,381

Due to the loss in the period no dilutive effect of share options is required to be calculated.

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