LONDON (ShareCast) - (Sharecast News) - Vianet Group reported solid first-half results for the six months ended 30 September on Tuesday, underpinned by strong recurring income, improved margins and disciplined cost control, as the group proposed a 33% increase in its interim dividend.
The AIM-traded provider of data, analytics and payment solutions said recurring revenue represented 84% of total income, helping maintain overall revenue stability at £7.67m, compared with £7.69m a year earlier.

EBITDA rose 11.6% to £1.73m, despite a £0.14m strategic investment in its US subsidiary Beverage Metrics.

Operating profit increased 10.4% to £1.58m before exceptional items and share-based payments.

Gross margins improved to 68% from 67%, reflecting operational efficiencies, while operating cash flow after working capital movements reached £1.7m, equivalent to around 100% of EBITDA.

Net debt halved to £0.5m from £1m, with cash balances rising to £2.5m after £0.25m of share buybacks and dividend payments totalling £0.29m.

Vianet said both of its divisions performed well despite ongoing UK economic uncertainty ahead of the government's November Budget, supported by contract expansions and new customer wins.

The firm declared a proposed 0.4p per share interim dividend, up from 0.3p last year.

"I'm pleased with the progress the business has made in the first half, particularly given the broader economic backdrop," said chair and chief executive James Dickson.

"The continued growth in recurring revenues and cash generation, driven by the expansion of existing customer contracts and the addition of new clients, highlights the quality of our business.

"We remain confident in the group's outlook for the remainder of the year."

Vianet said its strong base of recurring income and robust pipeline provided a solid platform for the second half, though it cautioned that the timing of new project starts remained dependent on customers' investment cycles.

The company said it would publish its half-year results on 2 December.

At 1605 GMT, Vianet shares were down 0.38% at 65p.

Reporting by Josh White for Sharecast.com.

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