Vianet offers a rare mix of **88% recurring revenue**, net cash, and underappreciated US expansion potential, leaving the shares at £0.68 looking mispriced versus a software-led, high-retention industrial IoT model.
Overview
Vianet Group plc is a niche B2B IoT and payments company supplying telemetry hardware, cashless payment terminals and cloud analytics to hospitality and unattended retail customers. Its investment case rests on a high-quality revenue model in which **recurring revenue accounted for 88% of FY2026 turnover**, supported by long-term contracts and operationally embedded hardware that creates meaningful switching costs. The UK business remains the mature cash-generative core, while the US and Canada provide the group’s principal medium-term growth runway, particularly through Beverage Metrics in hospitality.
Financially, FY2026 was modest on headline growth but stronger underneath. Revenue rose **1.5% to £15.50 million**, recurring revenue increased **3.3% to £13.60 million**, and gross margin held at **68.0%**. Pre-exceptional PBT grew **16.1% to £1.302 million**, even though statutory PBT fell to **£0.832 million** due to **£0.47 million** of exceptional costs tied to leadership transition, restructuring and advisory activity. Cash generation was strong, with post-working-capital cash flow at **96% of EBITDA**, helping the balance sheet improve from **£0.38 million net debt** to **£0.44 million net cash**, then to **£0.70 million net cash by 30 June 2026**.
The near-term debate is whether the market is over-penalizing temporary issues such as the 3G-to-4G migration and depressed statutory EPS, while underappreciating operating leverage, US rollout potential, and a broker target of **£2.10** versus a share price around **£0.68**.