UVENCO UK PLC SnackTime plc ("the Company")
16 March 2016
Final Results
SnackTime plc today announces its final audited results for the period ended 27 March 2015.
The Annual Report is being despatched to shareholders today and will also be available from the Company's website, www.snacktime.com.
Financial Highlights
Revenues decreased by 14% (2014 - decreased by 8.3%)
Adjusted loss before finance income and charges, depreciation, exceptional items, amortisation, share option charges and tax of £1,110,277 (2014 - profit of £1,138,940)*
Loss before taxation of £4,383,595 (2014 - Loss of £8,537,680)
Net assets of £1,222,264 (2014 S £2,696,688) following goodwill and intangible impairment of
£448,532 (2014 - £4,498,430)
Gross profit has decreased from 55% to 54%.
Net cash outflow from operating activities of £937,125 after exceptional items. (2014 - Inflow of £191,672)
Administration expenses, before exceptional items, amortisation and share option expenses but including depreciation, increased by 2.8% to £11,087,636 (2014 - £10,784,838)**. Total administration expenses reduced by 30.6% to £12,755,675 (2014 C £18,391,103).
*C Arrived at from taking the Loss before tax, finance income and charges, exceptional items, amortisation and share option charges of £2,378,510 from the Statement of Comprehensive Income and adding back depreciation of £1,268,233
** C As set out on the Statement of Comprehensive Income
CHAIRMAN'S STATEMENT PERIOD ENDED 27 MARCH 2015I am belatedly presenting the audited results for the period ended 27 March 2015. It has been another difficult period in which the refinancing and restructuring of the Group have again been the overSriding priority. Revenues continued to decline and operating cash generation was not sufficient to meet our other cash needs putting considerable pressure on our team, our suppliers and our funders.
Despite these difficulties, the Group is looking to the future with the resolve that often results from tough times. Many of the hard decisions have been made, actions taken, and we have been very fortunate to receive such strong support from so many key stakeholders. This support has resulted in substantial funds being raised throughout 2014 and 2015 which is detailed later in this statement. It should be noted that this Chairman's statement covers a period of nearly 2 years up to March 2016.
Turnover for the period ended 27 March 2015 was down 14% to £16,167,197 (2014: £18,810,814) producing an operating loss before amortisation, share option charges and exceptional costs of
£2,378,510 (2014: loss £427,433). The loss before taxation for the period was £4,383,595 (2014 - loss £8,537,680).
EBITDA before exceptional costs and share based payments for the period was a loss of £1,110,277 (2014: profit £1,156,250). Following exceptional costs of £1,432,835, including tangible and intangible impairments of £933,532 (2014: £6,578,644), the postStax loss was £4,068,329 (2014: loss
£7,741,521).
Gross margins decreased slightly to 54% (2014: 55%) while our distribution and administration costs before exceptional, share option costs and amortisation rose 3% to £11,087,636 (2014: £10,784,838).
Total administration costs for the period were £12,755,675 (2014 C £18,391,103).
Net finance charges decreased to £337,046 (2014: £503,982) and net borrowings at 31 March 2015 had decreased to £3,724,145 (2014: £4,806,200), including shareholder loans of £1,622,256 (2014:
£1,622,256).
The final results are an EBITDA loss before exceptional items of £1,110,277, exceptional costs of
£499,303 incurred during the period. This is in line with our announcement on 4 March 2016, but falls well behind the performance announced in July 2015 of an expected £280,000 EBITDA (after deducting additional provision of £270,000) and £650,000 for exceptional items. The difference has resulted from writeSdowns that have been necessary to ensure that our balance sheet does not overS state the underlying value of the assets and liabilities given the going concern position detailed in this report. These writeSdowns which have reduced the values of cash and stock in machines, inventories and debtors have resulted in an additional expense of £1,239,580 across the Group's EBITDA and exceptional costs compared to our period end management accounts. There is however no further cash impact from these adjustments and the underlying runSrate of our distribution and administration costs is today significantly below the £11,087,636 charge (before exceptional, share option costs and amortisation) for the year.
Audit
The long delay in announcing the results for the year has resulted from a breakdown in our internal controls and a lack of adequate accounting records in certain subsidiaries and the parent company. As a result, management were able to reconcile the closing group statement of financial position and company balance sheet but were not able to reconcile all the differences in the group statement of comprehensive income and the group statement of cash flows. The closing balances represented in our balance sheet are not in question, but any asset we have not been able to substantiate appropriately has been writtenSoff. As a result BDO were unable to obtain the audit evidence they required over the categorisation of transactions in the Group Statement of Comprehensive Income and the Group Statement of Cash Flows and the related notes and they have issued a qualified opinion on the financial statements. Therefore, statutory and nonSstatutory performance measures extracted from these statements referred to in the Financial Highlights, this statement, Directors' Report and Strategic Report are subject to qualification. The Auditor's Report covers this in more detail.
CHAIRMAN'S STATEMENT (CONTINUED) PERIOD ENDED 27 MARCH 2015As a result of the above, the Company has taken a number of steps to improve the timeliness and accuracy of both financial and management reporting. These include the recruitment of an additional qualified accountant in Blackburn to focus on the vending division_ the onSgoing relocation of all financial accounting (other than Drinkmaster) to Blackburn which is expected to complete this month_
further investment into the accounting system, specifically in the areas of fixed assets, purchase ledger and report writing_ the development of a revenue assurance and data analysis function in London to ensure the completeness and accuracy of amounts invoiced to customers_ and the retention of interim staff to ensure the delivery of the 2016 audit in a timely and cost efficient manner.
Further I would like to draw your attention to the matter of Going Concern which is again covered in the Auditor's Report. The Directors have drawn up these accounts as a going concern on the basis of a letter of support provided to them by the Company's majority shareholder Mr Belotserkovsky and the onSgoing support of the CoSoperative Bank. The reasons supporting this position are outlined in the accounting policy note 1 as well as being an emphasis of matter within the Auditor's Report.
Throughout the reporting period and the remainder of 2015 calendar year, the Company was involved in reSstructuring its balance sheet. This activity resulted in several transactions which are detailed below:S
In June 2014, Versatel Co Limited subscribed for 3.8 million new shares at 15 pence per share raising
£570,000.
In October 2014, a second subscription by Versatel Co Limited for a further 12 million new shares also at 15 pence per share, raised £1,800,000 (gross) of further investment. This second subscription required a vote by the independent shareholders to approve the waiver of the provisions of Rule 9 of the City Code, which was duly passed at the General Meeting held on 28 October 2014.
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.
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 to strengthen the Group's balance sheet.
In February 2016, we 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.
.
Further details of these subscriptions are available on our website, www.snacktime.com.
Amendments to the agreements with the CoOOperative Bank
Throughout this period, discussions have also continued with the CoSOperative Bank. Loan repayments have been sporadic, but by 27 March 2015 the outstanding balance had reduced to
£2,050,939 which had reduced further to £1,829,995 by 29 February 2016. The £750,000 overdraft facility ran alongside the loan facility throughout the period.
CHAIRMAN'S STATEMENT (CONTINUED) PERIOD ENDED 27 MARCH 2015In February 2016, a new agreement was reached with the CoSOperative Bank to extend the Company's existing £750,000 overdraft facility to the end of 2016. In addition, agreement has been reached in respect of the secured loan facility to waive all covenant testing to the end of 2016, and fix the aggregate repayments due in calendar year 2016 to £350,000.
Based upon management's current forecasts, a covenant breach might occur in December 2016 when testing resumes. The existence of this potential breach and its remedy are referred to in the going concern note at various points throughout this Annual Report. Whilst the CoSoperative Bank continues to show flexibility and support around the timing of our loan repayment schedule.
On 17 September 2015, trading on AIM was suspended in the Company's shares due to it being unable to publish these accounts within 6 months of the year end, as required by the AIM Rules for Companies.
It is expected that following publication of these accounts, and announcement of the unaudited results for the six months ended 30 September 2015, trading will resume in the Company's shares on AIM in due course.
During FY15, 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. 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:S
Technology S 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 growing Franchise network S 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 giving us a unique offering for our customers. Ultimately success is driven by delivering consistent quality, from hygienic looking machines whenever required.
Drinkmaster is now seeing a key shift in its core product and market. Seal Cup sales have overtaken those of the Drink Pac with considerable growth expected in export markets. The 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.
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-Finals2-RNS.pdf
