Final Results

11th Aug 2008 07:00



11 August 2008

SNACKTIME plc

("SnackTime", the "Company" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2008

SnackTime is pleased to announce its preliminary results for the year ended 31 March 2008.

FINANCIAL HIGHLIGHTS

Turnover increased by 27% to £3.8 million (2007: £3.0 million)

Gross profit increased by 29% to £3.1 million (2007: £2.4 million)

Adjusted profit after tax increased by 34% to £254K (2007: £189K)

Strong balance sheet with cash at the year end of £1.9 million

OPERATIONAL HIGHLIGHTS

6,500 SEQs as at 31 March 2008 (2007: 4,500) a 44% increase

Admission to AIM in December 2007 raising £3 million gross

Blair Jenkins, CEO, commented:

 

"2007/08 was a transformational year for the Company with its admission to AIM and successful fundraising in December 2007. We are very pleased with the Company's performance in 2007/08 both in terms of our number of SEQs and our financial results which are ahead of expectations. Demand for our products continues to grow and we look forward to another year of further growth with confidence."

Enquiries:

SnackTime plc	Tel: 01189 773 344
Blair Jenkins, Chief Executive Julia Brand, Finance Director
Arbuthnot Securities	Tel: 020 7012 2000
Tom Griffiths/Alasdair Younie

Notes to Editors: -

SnackTime plc (AIM: SNAK.L), is the holding company of SnackTime UK, which is one of the UK's largest national operators of snack and chilled drink vending machines. The Group has approximately 6,500 installed SEQs located throughout the UK, which are serviced by its five main depots located in Cumbernauld (near Glasgow), Manchester, Alcester, Wokingham, and Belfast. Each main depot is responsible through a team of area managers, merchandisers and engineers for installing, maintaining and restocking all of the Group's vending machines.

CHAIRMAN'S STATEMENT

I am happy to report that 2007-8 was yet another successful year for SnackTime. The Company's estate of machines increased by 44% in 2007-8; with most of this growth occurring in the fourth quarter of the financial year. This estate growth was possible, largely as a result of the funding received from the successful flotation of the business on AIM in December 2007. A total of £3.0 million of new finance was raised for SnackTime at a time when the markets were particularly difficult for new entrants.

Sales for 2007-8 grew by 27% over the previous year, operating profits were £257k, but when adjusted for IPO costs (see Table 1) the operating profit increased by 27% to £388k.

The Company successfully launched a range of new glass fronted snack machines in the fourth quarter which have proved exceptionally popular with customers. The UK order book remains strong across all machine types and indeed due to customer demand SnackTime commenced operations in Northern Ireland in the third quarter of 2007. 

In addition to a strong UK trading position, we are pleased to report that there is strong international interest in SnackTime and the company has plans to enhance its growth by expanding its operations into mainland Europe in the near future. 

Michael Jackson

Chairman

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

SnackTime is one of the UK's largest national operators of snack and chilled drink vending machines. The Company has thousands of customers across both the private and public sector throughout the UK.

The year to 31 March 2008 was yet another successful year for SnackTime. The Company's machine estate increased by 44%, with most of this growth occurring in the fourth quarter of the financial year. As at 31 March 2008, the Company had circa 6,500 machines in operation.

This growth was possible, largely as a result demand and the funding received from the Company's successful flotation on AIM in December 2007. A total of £3.0 million of new finance was raised for SnackTime at a time when the markets were particularly difficult for new entrants.

Sales for 2007-8 grew by 27% to £3.8 million (2007: £3.0 million). After taking into account IPO/PLC costs SnackTime's EBITDA improved by 16% to £660K (2207: £568K) and adjusted PBT improved by 34% to £254K (2007: 189K).. 

The Company successfully launched a range of new glass fronted snack machines in the fourth quarter which have proved exceptionally popular with customers. The UK order book remains strong across all machine types and indeed due to customer demand SnackTime commenced operations in Northern Ireland in the third quarter of the year.

UK Market Development

SnackTime is the dominant market leader in the provision of snack vending to the retailing sector in the UK. In 2008/9 SnackTime's main focus is snack expansion into public, leisure, motor trade and private industry sectors. Market research shows that there is approximately 150,000 snack machine opportunities in these areas. SnackTime intends to grow its UK market presence by another 2,500 machines this year.

New Products

SnackTime is actively seeking to broaden its product range into hot beverages and chilled filtered water units. There is strong demand for these services from existing customers and in addition the Company receives a large number of enquiries from potential customers in these areas. These products fit well with SnackTime's existing snack range not only from a sales perspective but also from an operational one as well. There are obvious economies of scale from increasing SnackTime's customer offering.

SnackTime is pursuing a dual strategy in terms of its intended expansion into hot beverages and water coolers. Firstly SnackTime is in discussion with a number of businesses already in these fields and if terms become acceptable then SnackTime intends to enter these new product areas via an acquisition. Secondly SnackTime is undertaking research and development work in order to develop a product range and business trading package that will enable SnackTime to enter these markets, if necessary, from the ground up.

International Market development

There has been strong international interest in Snacktime's offering for several years and following the IPO the company now has resources to enter targeted countries. SnackTime's brand partners are keen for the business to expand its geographic base. SnackTime is working very closely with its brand partners to identify the right markets and entry strategies. 

A significant number of customer sites have now been secured in Eire and SnackTime will commence operations in Eire in 2008. This country will be operated by SnackTime's existing operations.

Market evaluations are also progressing in Germany, Scandinavia, Netherlands and Eastern Europe. If market conditions are favourable and if the right partners or staff can be found, then the Company intends to start mainland Europe operations in 2009.

Current Trading and Outlook

The priorities for the business in the current year are:

Expansion of the core snacks range into new UK market sectors of the motor trade, leisure and public. SnackTime has already secured a major new contract in one of these sectors and expects to achieve its 2,500 machine growth this year via growth into these sectors;

Development of hot beverage division and filtered water divisions. Acquisition discussions are progressing as is R&D work; and

International development work is already underway. Operations will commence in Eire in Q4 2008 and mainland Europe in 2009. 

The Company is well placed for the current year and we believe that 2008/2009 will be another exciting year of good growth for the Company. 

Table 1 - Reconciliation to adjusted Profit

	£
Profit before Tax	122,851
Additional audit and accountancy fees	31,000
Additional Directors, and Non Exec Directors Costs	37,000
Additional share option costs	38,000
Additional staff costs	25,000
Adjusted profit before tax	253,851

RESULTS AND DIVIDENDS

The Group's revenue for the year was £3,807,784 (2007 - £2,998,505), yielding a gross profit of £3,053,465 (2007 - £2,432,147) and an operating profit of £257,139 (2007 - £305,256) 

The Group's profit for the year after taxation was £47,347 (2007 - £161,496). This gives basic earnings per share of 0.87p (2007 - 3.0p).

The Directors do not recommend payment of a dividend in respect of the year ended 31 March 2008.

KEY PERFORMANCE INDICATORS

	Year ended  31 March 2008	Year ended 31 March 2007
Revenue growth1	27.0%	25.0%
Operating margin2	6.8%	10.2%
Interest cover3	387%	490%
1 Percentage increase in Revenue.
2 Operating margin is calculated by dividing profit from operations by revenue.
3 Interest cover is calculated by dividing EBITD (profit before Interest, Tax and Depreciation) by net interest payments (gross interest payable less interest receivable).

The Directors are pleased to announce a 27% increase in sales this year which is in line with expectations. Interest cover has remained fairly constant over the current and prior years.

Non-financial Indicators

The Company's machine estate increased from 4,500 to just under 6,500 SEQs. This represents a 44% increase with most of this growth taking place in the fourth quarter of the financial year putting the Group in a good position for future years.

NON-CURRENT ASSETS

Details of changes in non-current assets are given in Note 12.

This preliminary announcement does not constitute the Company's statutory accounts within the meaning of Section 240 of the Companies Act 1985.

The results for the year ended 31 March 2008 have been extracted from the audited accounts of the Group for that year which have not yet been delivered to the Registrar of Companies. The financial information for the year ended 31 March 2007 is derived (after adjustments for International Financial Reporting Standards) from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditors on those filed accounts was unqualified. The accounts for the year ended 31 March 2008 and 31 March 2007 did not contain a statement under s237(2) or s237(3) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards.

Consolidated Income Statement

Year Ended 31 March 2008

	Notes	2008		2007
		£		£
Revenue	3	3,807,784		2,998,505
Cost of Sales		(754,319)		(566,358)
Gross Profit		3,053,465		2,432.147
Distributions cost and administration expenses		(2,796,326)		(2,126,891)
Profit from operations	5	257,139		305,256
Investment Income	6	40,107		2,596
Finance costs	7	(174,395)		(118,625)
Profit before taxation		122,851		189,227
Income Tax expense	10	(75,504)		(27,731)
Profit after taxation		47,347		161,496

All operations relate to continuing operations

Consolidated Statement of Changes in Equity

	Issued share capital	Share premium account	Share option reserve	Capital redemption reserve	Merger reserve	Retained  earnings	Total
	£	£	£	£	£	£	£
Balance as at 1 April 2006	97,224	-	-	1,274,279	116,892	(401,550)	1,086,845
Profit for the year	-	-	-	-	-	161,496	161,496
Total recognised income and expense for the year	-	-	-	-	-	161,496	161,496
Balance as at 31 March 2007	97,224	-	-	1,274,279	116,892	(240,054)	1,248,341
Balance as at 1 April 2007	97,224	-	-	1,274,279	116,892	(240,054)	1,248,341
Profit for the year	-	-	-	-	-	47,347	47,347
Issue of share capital	41,667	3,799,469	-	-	-	-	3,841,136
Share options expense	-	-	38,189	-	-	-	38,189
Share issue costs	-	(1,046,011)	-	-	-	-	(1,046,011)
Balance as at 31 March 2008	138,891	2,753,458	38,189	1,274,279	116,892	(192,707)	4,129,002

Consolidated Balance Sheet

31 March 2008

	Notes	2008		2007
		£		£
ASSETS
Non current assets
Property, plant and equipment	12	3,315,495		2,159,537
Deferred tax asset		52,169		127,673
		3,367,664		2,287,210
Current assets
Inventories	14	754,946		477,307
Receivables and prepayments	15	887,480		765,126
Cash and cash equivalents		1,903,020		89,281
		3,545,446		1,331,714
TOTAL ASSETS		6,913,110		3,618,924
LIABILITIES
Current liabilities
Borrowings	16	(649,010)		(376,339)
Trade and other payables	17	(769,780)		(960,508)
		(1,418,790)		(1,336,847)
Non current liabilities
Borrowings	16	(1,344,155)		(833,206)
Trade and other payables	17	(21,163)		(200,530)
		(1,365,318)		(1,033,736)
TOTAL LIABILITIES		(2,784,108)		(2,370,583)
NET ASSETS		4,129,002		1,248,341
EQUITY
Share capital	19	138,891		97,224
Share premium account	19	2,753,458		-
Merger reserve	19	116,892		116,892
Capital redemption reserve	19	1,274,279		1,274,279
Share option reserve	19	38,189		-
Retained earnings	19	(192,707)		(240,054)
TOTAL EQUITY		4,129,002		1,248,341

Consolidated Cash Flow Statement

Year Ended 31 March 2008

		2008		2007
		£		£
Cash flow from operating activities
Adjusted for:
Profit before taxation		122,851		189,227
Finance costs		174,395		118,625
Finance income		(40,107)		(2,596)
Depreciation of property, plant and equipment		325,724		263,029
Profit on disposal of property, plant and  equipment		(21,314)		-
Share based payment expense		38,189		-
Operating cash flow		599,738		568,285
(Increase) in inventories		(277,640)		(194,486)
(Increase) in receivables		(122,354)		(36,098)
(Decrease)/increase in payables		(370,094)		231,936
Cash generated from operating activities		(170,350)		569,637
Interest paid		(174,395)		(118,625)
Net cash from operating activities		(344,745)		451,012
Cash flow used in investing activities
Interest received		40,107		2,596
Proceeds on disposal of property, plant and equipment		51,491		-
Purchase of property plant and equipment		(1,511,859)		(507,970)
Net cash used in investing activities		(1,420,261)		(505,374)
Cash flow used in financing activities
Repayment of borrowings		(86,033)		(152,461)
Hire purchases advances		826,871		(42,605)
Proceeds on issues of shares		2,795,125		(9,050)
Net cash used in financing activities		3,535,963		(204,116)
Net increase/(decrease) in cash and cash equivalents		1,770,957		(258,478)
Cash and cash equivalents
Cash and cash equivalents at beginning of year		(35,891)		222,587
Cash and cash equivalents at end of year		1,735,066		(35,891)
Cash and cash equivalents comprise:
Cash		1,903,020		89,281
Overdrafts		(167,954)		(125,172)
		1,735,066		(35,891)

Notes to the audited year results

1. presentation of financial statements

General Information

Snacktime plc is a public limited Company incorporated in the United Kingdom under the Companies Act 1985 (registered number 06135746). The Company is domiciled in the United Kingdom and its registered address is Unit 7, Station Industrial Estate, Oxford Road, Wokingham, Berkshire, RG41 2YQ. The Company's shares are traded on the Alternative Investment Market (AIM).

The principal activity of the Group is the installation and operation of snack vending machines.

Basis of preparation

These consolidated financial statements are presented on the basis of International Financial Reporting Standards (IFRSs) as adopted by the European Union. There has been no material change to the balance sheet, income statement or cashflow as a result of adopting IFRS compared to the accounts previously prepared under UK GAAP upon which these accounts are based.

The Company was incorporated on 5 March 2007 and on 22 November 2007 the Group underwent a reconstruction in which Snacktime UK Limited (formerly Snacktime Limited), a company registered in England and Wales, was included in the Group. The combination was accounted for using the merger method of accounting. Merger accounting falls outside the scope of International Financial Reporting Standard Number 3 'Business Combinations' therefore the accounts were prepared using the guidance contained with Financial Reporting Standard 6 'Acquisitions and mergers'. The results have been prepared as if the Group had been established throughout the current and previous year, the prior year comparative figures being restated to include the results of Snacktime UK Limited to 31 March 2007. 

The Group financial statements of Snacktime plc consolidate the financial statements of Snacktime plc (formerly Intercede 2174 Limited) and Snacktime UK Limited (formerly Snacktime Limited). Note 24 of the financial statements shows the consolidated income statement from the date of incorporation to 31 March 2008 in accordance with the Companies Act 1985.

The following IFRS standards, amendments and interpretations have been released but are not effective for the current period. The adoption of these standards, amendments and interpretations is not expected to have a material impact on the Company's profit for the year or equity. However, the revisions to IAS 1 and IFRS 8 will impact upon the presentation of the financial statements:

IAS 1 (revised September 2007) Presentation of Financial Statements will make a number of changes to the overall presentation of the financial statements and is effective for the year ended 31 March 2010.

IAS 14 Segment Reporting (revised January 2008). The standard is effective for the year ended 31 March 2010.

IAS 23 (revised) Borrowing Costs removes the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. The standard is effective for the year ended 31 March 2010.

IAS 27 Consolidated and Separate Financial Statements (January 2008). The standard is effective for the year ended 31 March 2010.

Amendment to IFRS 2 Share Based Payment Vesting Conditions and Cancellations (revised January 2008). The standard is effective for the year ended 31 March 2010.

IFRS 3 Business Combinations (revised January 2008). The standard is effective for the year ended 31 March 2011.

IFRIC Interpretation 11: IFRS 2 - Group and Treasury Share Transactions is first applicable for the year ended 31 March 2009.

IFRIC Interpretation 12: Service Concessions is first applicable for the year ended 31 March 2009.

IFRIC Interpretation 13: Customer Loyalty Programmes is first applicable for the year ended 31 March 2010.

IFRIC Interpretation 14: IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction is first applicable for the year ended 31 March 2009.

Amendments to IAS 32 Financial Instruments - Presentation are first applicable for the year ended 31 March 2010.

Improvements to IFRS 5 Non Current Assets Held for Sale and Discontinued Operations are first applicable for the year ended 31 March 2011.

IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation.

IFRS 8: Operating Segments. The standard is effective for the year ended 31 March 2010.

IFRIC 15 Agreements for the Construction of Real Estate is first applicable for the year ended 31 March 2010.

IFRIC 16 Hedges of a Net Investment in a Foreign Operation is first applicable for the year ended 31 March 2010.

Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The principal areas where judgement was exercised is as follows:

The Company receives contributions from suppliers towards the installation and refurbishment of vending machines. The Directors are required to assess the amounts receivable at each reporting date and whether all the conditions have been met to enable these to be recognised.

Property, plant and equipment includes the value of the vending machine estate. The Directors annually assess both the residual value of these assets and the expected useful life of such assets which is currently judged to be 10 years, based on historic data.

Sales from vending machines are recognised at the point of sale to the customer. At each year end, the Directors are required to make an estimate of sales where the vending machine has not been emptied or inspected at the year end date.

Share based payment valuations are based upon a Black-Scholes formulae which requires various assumptions to be made as set out in note 20.

Due to the lack of guidance under IFRS on Merger accounting the directors have chosen to follow the guidance set out in the UK accounting standard FRS 6 'Mergers and acquisition'. 

2. significant ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

a) Basis of Accounting

The financial statements have been prepared in accordance with applicable accounting standards and the historical cost convention.

b) Basis of Consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings. The merger method of accounting has been adopted as detailed in note 1 and the directors report. Intra-group revenues and profits are eliminated on consolidation and all revenue and profit figures relate to external transactions only.

Under Section 230 of the Companies Act 1985 the Company is exempt from the requirement to present its own income statement. The profit for the financial period, of the holding Company, as approved by the Board, was £nil. There were no transactions in the income statement.

c) Revenue recognition

Revenue is measured by reference to the fair value of consideration received or receivable by the group for goods supplied, excluding VAT and trade discounts. Revenue for goods sold is recognised at the date of sale when the significant risks and rewards of ownership have transferred to the buyer. 

d) Cost of sales

Contributions receivable from suppliers towards the installation and refurbishment of vending machines is recognised when earned and included as a reduction in the cost of sales. 

e) Income Tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year.

Deferred tax is recognised on all temporary differences. This involves comparison of the carrying amount of assets and liabilities in the consolidated financial statements with their respective tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax is also recognised on investments in subsidiaries

Deferred tax liabilities are provided for in full. Deferred tax assets and liabilities are calculated without discounting, at tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (tax laws) that have been enacted or substantively enacted by the balance sheet date. All changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity. 

Tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the asset can be recognised and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

f) Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment provisions.

Depreciation is provided to write off the cost, less the estimated residual value, of property, plant and equipment by equal instalments over their estimated useful economic lives as follows:

Leasehold Improvements	-	over the term of the lease
Plant & Machinery	-	10 - 25% straight line basis
Fixtures & Fittings	-	25% straight line basis
Motor Vehicles	-	25% straight line basis

Material residual value estimates are updated as required, but at least annually, whether or not the asset is revalued.

Impairment reviews of property, plant and equipment are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

g) Leases

Where a lease is entered into which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease. The asset is recorded in the balance sheet as an item of property, plant and equipment and is depreciated over the shorter of its estimated useful life or the term of the lease. Future instalments under such leases, net of finance charges, are included within payables. Rentals payable are apportioned between the finance element, which is charged to the income statement, and the capital element, which reduces the outstanding obligation for future instalments. Land and building elements of lease agreements are separately assessed in accordance with IAS 17.

All other leases are treated as operating leases and the rentals payable are charged on a straight line basis to the income statement over the lease term.

h) Inventories

Inventories are stated at the lower of purchase cost from third parties and net realisable value on a first in first out basis. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula.

i) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

j) Share-Based Payments

The Group has applied the requirements of IFRS 2 'Share-based payment', as amended by IFRIC Interpretation 2 - IFRS 2 Group and Treasury share transactions. 

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. Where services are from employees fair value is determined indirectly by reference to the fair value of the instrument granted. The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting. 

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital.

Fair value is measured based upon a Black-Scholes pricing model. 

k) Financial Instruments

A new standard, IFRS 7 'Financial instruments: Disclosures' has become mandatory for reporting periods beginning on 1 January 2007 or later. This standard, which replaces rules previously set out in IAS 32 'Financial Instruments: Presentation and disclosures' has been applied by the Group in its 2007 consolidated financial statements. All disclosures relating to financial instruments, including all comparative information, have been updated to reflect the new requirements. The first time application of IFRS 7 has not resulted in any prior-period adjustments of cash-flows, net income or balance sheet items.

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the group becomes a party to the contractual provisions of the instrument. Financial liabilities are recorded initially at fair value, net of direct issue costs as an expense in the income statement with a corresponding credit to equity.

Financial liabilities are recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance costs in the income statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.

Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes a party to the contractual terms of the instrument. 

Financial assets, other than hedging instruments, can be divided into the following categories:

Loans and receivables

Financial assets at fair value through profit or loss

Financial assets are assigned to the different categories on initial recognition, depending on the characteristics of the instrument and its purpose. A financial instrument's category is relevant for the way it is measured and whether resulting income and expenses are recognised in profit or loss or charged directly against equity.

Bank borrowings

Bank loans and overdrafts are initially recorded at fair value net of transaction costs. Finance charges including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis to the income statement using the effective interest method and are added to the carrying value of the instrument to the extent that they are not settled in the period in which they arise.

Trade payables

Trade payables are not interest bearing and are stated at their fair value on initial recognition. They are then accounted for using the effective interest rate method.

Equity instruments

Equity instruments, which are detailed below, issued by the Group are recorded at the proceeds received, net of direct costs.

Equity comprises the following:

"Share capital" represents the nominal value of equity shares.

"Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

"Merger reserve" represents an amount arising on the consolidation which was accounted for in accordance with FRS 6 as detailed in note 1.

"Capital redemption reserve" which arose on the redemption of shares.

"Retained earnings" represents retained profits.

"Share option reserve" relates to the company's share option scheme detailed in note 20

3. REVENUE

The revenue for the Group for the current year arose from the installation and operation of snack vending machines. The Board of Directors regards the Company's operations as one single operating unit for its primary reporting segment, namely the sale of snack items, and its secondary reporting segment as the geographical region in which the Company operates, being located wholly within the United Kingdom.

4. AUDITOR'S REMUNERATION

The analysis of auditor's remuneration is as follows:

	2008	2007
	£	£
Fees payable to the Company's auditors for the audit of the Company's annual accounts
Total audit fees	-	-
Fees payable to the Group's auditors for other
services to the Group
The audit of the Company's subsidiaries pursuant to legislation	27,000	13,350
Other services in relation to taxation	76	56
Services relating to corporate finance transactions	50,885	-
All other services	6,386	473
	84,347	529
	84,347	13,879

Fees payable to the Group's auditors in respect of services relating to corporate finance transactions amounting to £50,885 are included in the share premium account.

The Group audit fee is met by the subsidiary undertaking, Snacktime UK Limited

5. PROFIT from operations

	2008	2007
	£	£
This is stated after charging/(crediting):
Depreciation of property, plant and equipment
- owned by the group	209,319	150,956
- held under finance leases	116,405	112,073
Profit on disposal of property, plant and equipment	(21,314)	-
Rentals under operating leases - Land and buildings	48,436	56,256

6. investment income

	2008	2007
	£	£
Bank interest receivable	40,107	2,596

7. Finance CoSTS

	2008	2007
	£	£
Interest on bank loans and overdrafts	102,672	66,558
Interest on obligations under finance leases	71,723	52,067
	174,395	118,625

8. dIRECTORS' REMUNERATION

	2008	2007
	£	£
Executive salaries, share options and benefits
	205,163	148,550

The emoluments of the directors for the year were as follows:

	Salary	Fees	Benefits	2008
	£	£	£	£
Non-Executive Directors
D Lowe	-	16,478	-	16,478
M Jackson	-	8,317	-	8,317
Executive Directors
B Jenkins	78,333	-	430	78,763
I Forde	68,333	-	505	68,838
J Brand	57,292	-	270	57,562
	203,958	24,795	1,205	229,958

Key management personnel are considered to be the Company's Directors.

Directors' interests in share options

			Number of
			options at		Earliest	Exercise
	Option	Date of	31 March	Exercise	exercise	expiry
	type	grant	2008	price	date	date
B Jenkins	EMI Option	19/12/2007	104,169	144.00p	19/12/2010	19/12/2020
I Forde	EMI Option	19/12/2007	97,918	144.00p	19/12/2010	19/12/2020
J Brand	EMI Option	19/12/2007	58,334	144.00p	19/12/2010	19/12/2020

260,421 options were granted to Directors during the year. Options have been granted to Directors whose performances and potential contribution were judged to be important to the operations of the Group, as incentives to maximise their performance and contribution.

The mid-market price of the ordinary shares on 31 March 2008 was 137p and the range during the year was 131.5p to 151.5p.

During the current and prior years retirement benefits were accruing to no Directors in respect of money purchase pension schemes.

Gains made by the Directors on the exercise of share options were £nil (2007 - £nil).

9. Staff numbers and costs

The average monthly number of people employed by the Group (including Executive Directors) during the year, analysed by category, were as follows:

	2008	2007
Operational staff	22	21
Administrative staff	16	14
	38	35

The aggregate payroll costs were as follows:	2008	2007
	£	£
Wages, salaries and fees	978,366	735,855
Social security costs	107,525	79,579
Cost of options issued to staff (see Note 20)	38,189	-
	1,124,080	815,434

10. Taxation

	2008	2007
	£	£
Current year tax
Corporation tax	-	-
Deferred tax
Origination and reversal of timing differences	54,926	27,731
Adjustments in respect of prior periods	20,578	-
Tax on profit on ordinary activities	75,504	27,731

Factors affecting tax charge for the year:

The tax assessed for the year is lower than the standard rate of corporation tax in the UK (30%). The differences are explained below:-

	2008	2007
	£	£
TAX RECONCILIATION
Profit per accounts before taxation	122,851	189,227
Tax on profit on ordinary activities at standard
CT rate of 30%	36,855	56,768
Expenses not deductible for tax purposes	12,350	1,265
Ineligible depreciation	1,995	1,239
Adjustments to deferred tax for prior years	20,578	-
Deferred tax adjustments	10,866	(31,541)
Effect of change in tax rate on opening balances	(7,140)	-
Current tax charge for the year	75,504	27,731

Factors affecting future charges

The Corporation tax rate will become 28% with effect from April 2008.

11. EARNINGS per share

Earnings per share is calculated on the basis of profit for the year after tax, divided by the weighted average number of shares in issue for the year ended 31 March 2008 of 5,449,139.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares. Potential dilutive ordinary shares arise from share options and warrants. For these, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the exercise price attached to outstanding share options. Thus the dilutive weighted average number of shares considers the number of shares that would have been issued assuming the exercise of the share options. 

	Year ended 31 March 2008			Year ended 31 March 2007
	Earnings	Weighted average no. of shares	Per share amount	Earnings	Weighted average no. of shares	Per share amount
	£	£	pence	£	£	pence
Earnings attributable to ordinary shareholders	47,347	5,449,139	0.87	161,496	5,449,139	3.0
Dilutive effect of options		119,640			119,640
Diluted earnings per share		5,568,779	0.85		5,568,779	2.9

12. Property Plant and equipment

				Furniture,
	Leasehold	Plant and	Motor	fittings and
	improvements	equipment	vehicles	equipment	Total
	£	£	£	£	£
Cost
At 1 April 2006	37,134	2,199,688	230,136	78,707	2,545,665
Additions	1,562	428,752	65,092	12,564	507,970
At 1 April 2007	38,696	2,628,440	295,228	91,271	3,053,635
Additions	8,911	1,473,302	2,231	27,415	1,511,859
Disposals	-	-	(83,888)	-	(83,888)
At 31 March 2008	47,607	4,101,742	213,571	118,686	4,481,606
Depreciation
At 1 April 2006	10,668	498,243	88,549	33,609	631,069
Charge for the year	5,596	175,235	51,900	30,298	263,029
At 1 April 2007	16,264	673,478	140,449	63,907	894,098
Charge for the year	13,417	244,468	48,742	19,097	325,724
Disposals	-	-	(53,711)	-	(53,711)
At 31 March 2008	29,681	917,946	135,480	83,004	1,166,111
Net Book Value
At 31 March 2008	17,926	3,183,796	78,091	35,682	3,315,495
At 31 March 2007	22,432	1,954,962	154,779	27,364	2,159,537

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:

	2008	2007
	£	£
Plant and machinery	1,463,950	372,175
Motor vehicles	47,797	111,237
	1,511,747	483,412

13. deferred taxation ASSET

The gross movements on the deferred tax account are as follows:

	2008	2007
	£	£
At 31 March 2007	127,673	155,404
Income statement charge	(75,504)	(27,731)
At 31 March 2008	52,169	127,573

deferred tax assets

The deferred tax assets are made up as follows:

	Accelerated
	capital	Tax
	allowances	losses	Total
	£	£	£
At 31 March 2007	88,799	38,874	127,673
Charged to income	(317,021)	241,517	(75,504)
At 31 March 2008	(228,222)	280,391	52,169

14. INVENTORIES

	2008	2007
	£	£
Finished Goods	754,946	477,307
Inventories at net realisable value	754,946	477,307

No inventory was written down in the current or previous year. The carrying value of inventory recognised as an expense was £2,029,361 (2007 - £1,613,248)

15. receivables and prepayments

	2008	2007
	£	£
Trade receivables	526,707	340,117
Other receivables	360,773	425,009
	887,480	765,126

The recoverability of debtors is not considered to be an issue to the Company as the main debtors are restricted to three large blue chip companies with whom there is a long standing relationship.

Some of the trade receivables are past due as at 31 March 2008. The ageing analysis of these trade receivables is as follows:

	2008	2007
	£	£
One month overdue	51,798	132,685
Two to six months overdue	132,216	179,011
Over six months overdue	1,719	18,213
	185,733	329,909

16. BoRrowings

	2008	2007
	£	£
Unsecured borrowings at amortised cost
Bank overdrafts	167,954	125,172
Secured borrowings at amortised cost
Bank loans	597,205	683,238
Hire purchase	1,228,006	401,135
	1,993,165	1,209,545
Amounts due for settlement within 12 months
Bank overdrafts	167,954	125,172
Bank loans	69,930	90,001
Hire purchase	411,129	161,166
	649,010	376,339
Amounts due for settlement after 12 months
Bank loans	527,278	593,237
Hire purchase	816,877	239,969
	1,344,155	833,206
	1,993,165	1,209,545

Terms and conditions of outstanding loans were as follows:

	Interest rate	Year of maturity	2008	2007
	%		£	£
Bank overdraft	3% over base rate	On demand	167,954	125,172
Bank loan	2.5% over base rate	2012	247,246	333,279
VC Loan	10%	2010	349,958	349,958

The face value in each case equates to the carrying book value. All loans are denominated in sterling. 

All loans and overdrafts are secured by a fixed and floating charge over the assets of the Company. Directors B Jenkins and I Forde have issued personal guarantees for the bank loan and overdraft.

Features of the Group's borrowings are as follows:

The Group's financial instruments comprise cash, a bank loan, a venture capital loan, hire purchase and finance leases, overdraft and various items arising directly from its operations such as trade payables and receivables. The main purpose of these financial instruments is to finance the Group's operations.

The main risks from the Group's financial instruments are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing these risks.

The financial assets of the Group are surplus funds, which are offset against borrowings under the facility, and there is no separate interest rate exposure.

Hire purchase and finance lease liabilities are secured upon the underlying assets.

Obligation under finance leases

	2008	2007
	£	£
Amounts payable under finance leases
Within one year	511,000	194,049
Two to five years	901,341	253,997
Less future finance charges	(184,335)	(46,911)
Present value of lease obligations	1,228,006	401,135
Less amounts due for settlement within 12 months	411,129	161,166
Amounts due for settlement after 2 - 5 years	816,877	239,969

It is the Group's policy to lease certain of its property, plant and equipment under finance leases. For the year ended 31 March 2008 the average effective borrowing rate was 6.0%. Interest rates are fixed at the contract dates. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations are denominated in sterling.

 

The fair value of the Group's lease obligations approximates to their carrying amount.

The Directors consider that the carrying amount of trade payables approximates to their fair value.

The analysis below shows the gross cash flows for the bank loan, which may differ to the carrying values of the liabilities at the balance sheet date.

	2008	2007
	£	£
Amounts payable under bank loans
Within one year	65,275	69,503
Two to five years	232,911	245,177
Greater than 5 years	-	98,862

17 TRADE AND OTHER PAYABLES

	2008	2007
	£	£
Due within one year
Trade payables	629,578	744,197
Social Security and other taxes	30,059	61,535
Accruals	110,143	154,776
	769,780	960,508
Due in more than one year
Trade payables	21,163	200,530

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.

18. SHARE CAPITAL

	2008
	£
Authorised equity share capital
87,316,800 ordinary shares of £0.02 each	1,746,336
Allotted, called up and fully paid equity share capital
At 31 March 2007 (4,861,200 ordinary shares of £0.02 each)	97,224
Ordinary shares issued during the year (2,083,333 ordinary shares of £0.02 each)	41,667
At 31 March 2008 (6,944,550 ordinary shares of £0.02 each)	138,891

423,966 options over shares with expiry dates beyond 2011 are retained for issue.

19. Share Premium and reserves

	Issued	Share	Share	Capital
GROUP	share	premium	option	redemption	Merger	Retained
	capital	account	reserve	reserve	Reserve	earnings
	£	£	£	£	£	£
Balance at
31 March 2007	97,224	-	-	1,274,279	116,892	(240,054)
Issue of shares	41,667	3,799,469	-	-	-	-
Share option expense	-	-	38,189	-	-	-
Share issue costs	-	(1,046,011)	-	-	-	-
Retained profit for the year	-	-	-	-	-	47,347
Balance at 31 March 2008	138,891	2,753,458	38,189	1,274,279	116,892	(192,707)

On 19 December 2007 2,083,333 £0.02 shares were issued for £1.44 per share.

The capital redemption reserve arose following the share reorganisation during the year.

20. EQUITY-SETTLED SHARE OPTION SCHEME

During the year the Company has introduced a share option scheme for certain employees of the Group, there were no existing schemes in operation. Options are exercisable at a price equal to the average quoted market price of the Company's shares at the date of grant. The vesting period is three years. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the option holder leaves the Group before the options vest.

Details of the share options outstanding during the year are as follows:

	2008	2008
	Number	Weighted
	of share	average
	options	exercise
Outstanding at the beginning of the year	-	-
Granted during the year	423,966	1.44
Outstanding at the end of the year	423,966	1.44

The weighted average remaining contractual life of the options outstanding at the year end is 987 days. The weighted average exercise price at the year end was £1.44.

	2008
IFRS 2 Fair value charge recognised as an expense in the income statement	£38,189
Average share price	137p

The inputs into the Black-Scholes option pricing model are as follows:

	2008
Expected volatility	50%
Expected life	3 years
Risk-free rate	4%
Dividend yield	N/A
Estimated option uptake:
Directors	100%
Non Directors	68%

Expected volatility was estimated from similar trading companies as directed by IFRS 2 as the Company does not have a sufficiently long trading history to enable volatility to be calculated mathematically with any degree of accuracy. 

21. FINANCIAL INSTRUMENTS

The accounting policies for financial instruments have been applied to the line items below:

Financial assets by category

	2008	2007
	£	£
Current assets
Trade and other receivables
- Loans and receivables	652,448	726,099
- Non financial assets	235,032	39,027
Cash and cash equivalents	1,903,020	89,281
	2,790,500	854,407

Financial liabilities by category

	2008	2007
	£	£
Current liabilities
Other financial liabilities	978,607	1,114,146
Non financial liabilities	440,183	222,701
Non current liabilities
Other financial liabilities	547,436	793,767
Non financial liabilities	817,882	239,969
	2,784,108	2,370,583

Interest rate sensitivity

The Group's policy is to minimise interest rate cash flow risk exposures on their hire purchase and finance lease arrangements by fixing the interest rate on the agreements. The VC loan is also fixed at 10%. However, the bank overdraft has a variable interest rate of 3% over base rate and the bank loan has a variable interest rate of 2.5% over base rate.

The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +1% and -1% (2007 - +1% / -1%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the Group's financial statements held at each balance sheet date. All other variables are held constant.

	2008		2007
	£	£	£	£
	+1%	-1%	+1%	-1%
Adjusted Net result for the year	43,195	51,499	156,911	166,081
Adjusted Equity	4,124,850	4,133,154	1,243,756	1,252,926

22. OPERATING LEASE ARRANGEMENTS

		2008
		£
Minimum lease payments under operating leases recognised as an expense in the year		48,436

At the balance sheet date the Group had commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:

	2008	2007
	£	£
Within one year	52,440	45,662
2 to 5 years	123,340	131,490
Over 5 years	-	47,507
	175,780	224,659

Operating lease payments represent rentals payable by the Group in respect of its properties. For properties the lease periods are negotiated for an average of fifteen years with five year reviews.

23. related party transactions

As part of the pre IPO fund raising in April 2007, Non Executive Directors Michael Jackson and David Lowe contributed £100,000 and £200,000 respectively as convertible loans with a coupon of 8%. During the year these were converted to Ordinary A shares at IPO at a 20% discount on the IPO price of £1.44.

During the year, Executive Director Blair Jenkins purchased a car from the company for £28,934 which was its deemed market value at the date of purchase.

24. consolidated income statement from the date of incorporation

The consolidated income statement from the date of incorporation on 5 March 2007 to 31 March 2008 for Snacktime plc.

		Period ended
		31 March
		2008
		£
REVENUE		4,047,942
Cost of sales		(722,157)
GROSS PROFIT		3,325,785
Distribution costs and administration expenses		(2,979,574)
PROFIT FROM OPERATIONS		346,211
Finance income		105,356
Finance costs		(181,564)
PROFIT BEFORE TAXATION		270,003
Income tax expense		(78,355)
PROFIT AFTER TAX		191,648

25. POST BALANCE SHEET EVENTS

On 5 April 2008 13,889 shares with a nominal value of £0.02 were issued for £1.44 per share.

26. Capital commitments

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

	2008	2007
	£	£
Property, plant and equipment	105,426	-

ENDFR BUGDILXGGGII

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