Partner Article

Teesside firm warns of profits drop

A Teesside-based data monitoring company has warned to expect a drop in operating profits.

Vianet Group, based in Stockton, says its beer flow monitoring products could be adversely affected by uncertainties created by proposed UK Government regulations, with installations of its iDraught product falling behind expectations.

The company –formerly known as Brulines – also claims uncertainty in the sector has also accelerated the number of pub closures and disposals, leading to a reduction in traditional beer monitoring installations to almost 17,000 sites at the half year.

In a trading update, Vianet said it is now forecasting an operating profit of close to £3m for the year ended March 2014, down from £3.3m last year.

However, the board said it is pleased that progress is being made in Vianet’s newer businesses, including in the coffee vending market.

“The vending division is trading profitably and the board believes there are good prospects for further contract developments in the second half of the year,” the update added.

The company also said that its operations in the US also continue to make “positive progress”.

It said the performance of initial installations of iDraught in both full commercial and pilot contracts with several national leisure chains meeting expectations.

Trading in the group’s fuel solutions division has also continued to improve, despite a slow start in the first quarter.

As previously announced at the group’s AGM in July, the company said it remains “highly conscious” of the uncertainty surrounding the Government’s proposed Statutory Code for Pub Companies and the adverse impact that the proposals for controlling beer flow monitoring may have on the group’s core leisure business.

It added: “The board remains hopeful of a positive outcome in the final Statutory Code, however it remains cautious about the short term outlook for the group’s core leisure division, until the new provisions of the Code are announced, particularly as the process may lead into the Christmas trading period.”

The business, which was formerly called Brulines, is based at Surtees Business Park in Stockton.

Vianet Group plc employs around 250 staff across the group, will announce its results for the six months ending September 30 on Tuesday, December 3.

This was posted in Bdaily's Members' News section by Martin Walker .