UVENCO UK PLC SnackTime plc ("the Company")
16 March 2016
Interim Results
SnackTime plc today announces it's interim results for the six month period ended 30 September 2015.
FINANCIAL HIGHLIGHTS
Turnover decreased by 6.2% to £7,984,874 (H1 2015: £8,515,941)
Gross Profit decreased 1% to £4,761,761 (H1 2015: £4,802,278)
Operating profits before depreciation and amortisation (EBITDA) decreased 2.6% to £385,901 (H1 2015: £396,279)
Operating losses before amortisation decreased by 40% to £224,593 (H1 2015: loss £376,199)
Losses for the period decreased by 2% to £688,670 (H1 2015: loss of £700,044)
Cash inflow after exceptional costs decreased to £219,819 (H1 2015: inflow £323,602)
Net cash from operating activities increased to £568,302 (H1 2015: outflow of £330,450)
For further information: SnackTime plc | |
Jeremy Hamer, Chairman Michael Maltby, Interim CFO | 0208 879 8300 |
Stockdale Securities Ltd. Tom Griffiths | 020 7601 6100 |
Richard Johnson |
I have pleasure in presenting the unaudited financial results of SnackTime plc for the six months ended 30 September 2015. As a result of the delayed publication of our audited accounts to 27 March 2015 much of the information that follows has already been announced.
The key financial results were:
Turnover decreased by 6.2% to £7,984,874 (H1 2015: £8,515,941)]
Gross Profit decreased 1% to £4,761,761 (H1 2015: £4,802,278), while gross margin increased to 59.6% (H1 2015: 56.4%), primarily reflecting improvements in negotiated pricing with suppliers]
Distribution and administration overheads fell slightly to £4,375,860 (H1 2015: £4,405,999)]
Operating profit before depreciation and amortisation (EBITDA) decreased 2.6% to £385,901 (H1 2015: £396,279)]
Exceptional items increased to £170,517 (H1 2015: £82,043), representing in particular the costs associated with restructuring the vending division that was largely completed during the period]
Loss for the period of decreased by 2% to £688,670 (H1 2015: loss of £700,044)] Cash inflow after exceptional costs decreased to £219,819 (H1 2015: inflow £323,602)] Net cash from operating activities increased to £568,302 (H1 2015 outflow £330,450)]
Purchase and refurbishment of vending equipment increased to £549,995 ((H1 £110,043) in part reflecting the ability of the Company to offer Unicum equipment on a free on loan basis in large NHS tenders]
Overall gross borrowings reduced by 30% to £4,324,865 (H1 2015: £6,167,252).
As the benefits of the operational changes discussed below are implemented, and as the improved supplier negotiations, and the reduced interest burden resulting from the restructuring of the balance sheet (see Post Balance Sheet Events) work there way through into the business, we expect to see an on`going improvement in operating cash generation in future periods that will provide a platform for the return to growth of the Company.
In May 2015, £100,000 was raised through the placing of 1 million new shares at 10 pence per share with certain directors and senior management of the Company. These proceeds went directly to reduce the balance of our bank loan.
In December 2015 it was announced that the Company had raised approximately £3,024,645 through the issue of 40,746,451 new shares. Of the total, £1,050,000 was subscribed for by new and existing investors at 5 pence per share to provide working capital for the Group, with the balance raised through the conversion of loan notes and other creditor balances at 10 pence per share to strengthen the Group's balance sheet.
In February 2016, the Company announced the conversion of a further £57,290 of loan notes at 10 pence per share. Of the original £1,622,456 of redeemable or convertible loan notes with maturities in either 2015 or 2018 all but £80,166 have now been converted to equity, together with any accrued but unpaid interest and redemption premium.
Details of these subscriptions are available on our website (www.snacktime.com)
The focus has continued to be on stabilising sales, improving operations, reducing costs while refinancing the business. The vending market remains very competitive with evermore retail operations offering hot drinks in particular throughout the 24 hour day, resulting in an annual volume decline of c.5% as reported recently by the AVA (Automatic Vending Association). But despite this additional competition, new vending opportunities arise continuously as existing 3 and 5 year contracts come to an end, alongside new commercial facilities opening regularly. There remains considerable opportunity. Our operated machine base is now stabilising and with an improved and more efficient operating platform we are dealing better with the challenges that taking on new business presents. The key elements of our strategy are as follows:`
Technology. We have been successful in gaining multiple public sector contracts by offering the very latest innovations the industry has to offer. Telemetry, NFC payments and smart phone loyalty applications are now a standard part of such offerings.
A strengthening Franchise network ` with the support of our key brand partners Mars, Walkers and Coca Cola we can offer an attractive franchise proposition with strong growth potential to the right franchisee. Our increasingly professional franchise support team should allow us to expand our network for several years to come by attracting franchisees who themselves are committed to growing their own businesses.
The vending division is concentrating on public sites with higher footfall, city centres and building activity around existing sites. Density of operation is a significant contributor to profitability. Our exclusive range of Unicum vending equipment is providing us a unique offering for our customers.
Drinkmaster is now seeing a key shift in its core product and market. New Seal Cup sales have overtaken those of the Drink Pac with considerable growth expected in export markets. The New Seal Cup is seen as an ideal on the go or retail convenience solution. Notably, we are now starting to see exports develop which will provide additional significant opportunities for growth.
Once again during this 6 months under review, a total review of support, sales and field structures has taken place. This has begun to drive another round of efficiencies and cost reductions, the full benefit of which will be seen during 2016. Our purchasing function has played a key role in the last 12 months in reducing costs, improving the quality of our products and maintaining supplier relationships through difficult times.
The 3 key depots in London, Blackburn and Corby (including Newport) have each been given greater autonomy and authority to provide the service their customers need locally. Behind the scenes they are soon to be driven as individual profit centres. City centre and public sites have been a particular focus with some notable wins in the NHS more recently. Service remains key to a customer renewing their contract at the end of its term with greater attention being given to the levels of machine functionality, presentation and hygiene.
The Franchise Network has remained largely stable operating 80 areas nationally. 15 sales were made during 2015 on the back of some well executed sales and marketing activity, although many of these sales were replacing a departing franchisee. A new role of Franchise Business Development Manager was also added to the structure to allow more support for a new franchisee to ensure they are meeting their year 1 business plans. There remain 40 further areas of the country that could support a franchisee providing the growth opportunity for the future.
Drinkmaster sales fell further after March 2015 due to the shake`up in their betting sector customers. More recently they are beginning to recover again due to the growth of New Seal Cup sales opening up export markets in particular. This new product is being focused on export, vending, retail and travel markets each of which has the potential to grow the revenue base and ensure there is less reliance on the gaming sector.
In November 2015 Mark Stone tendered his resignation and will leave the Company in April 2016. I would like to thank Mark for his contribution to the Group during a difficult period.
Tim James left the Board in November 2015 following 6 challenging years as our CFO. I would like to thank him also for his support and significant contribution to the Group. From December 2015 Michael Maltby has assumed responsibility as Interim CFO and Company Secretary.
Finally I would again like to thank all of our staff, new and continuing, who have supported us through another period of intense change.
Current Trading & prospectsThe environment for the Group continues to be challenging and we remain focussed on delivering consistent quality products while managing costs, from "clean, full and working" machines, whenever a purchase is desired (24 hour unmanned retailing). That said, we are convinced that the winners in the vending sector will be those who can harness new technologies such as wave and pay and telematics, where the active involvement of Uvenco provides us with a competitive advantage. With this in mind, we are encouraged by current trading and look forward to the future with increasing confidence.
Jeremy Hamer
Chairman
Date: 15 March 2016
SnackTime plc issued this content on 16 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 March 2016 10:30:38 UTC
Original Document: http://www.snacktime.com/documents/SNAK-Interims-RNS.pdf
