24th Dec 2007 11:18
Snacktime PLC24 December 2007 SNACKTIME plc UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007 Following the admission of its ordinary shares to AIM becoming effective on 19December 2007, Snacktime plc is obliged to release unaudited interim results for the 6 month period to 30 September 2007. Accordingly, SnackTime plc, announces today unaudited interim results for the six month period ended 30 September 2007. These results are those of Snacktime Limited only, which, on 29November 2007, changed its name to Snacktime UK Limited and 100 per cent. ofits share capital was acquired by SnackTime plc as part of a Group re-organisation. FINANCIAL HIGHLIGHTS • Turnover increased by £442,191 (an increase of 32% on 6 months to 30 September 2006) • Profit after tax for period of £16,788 (6 months to 30 September 2006 - loss of £4,924) • Gross profit increased by £214,080 (an increase of 19% on 6 months to 30 September 2006) • Administrative costs increased by £224,933 mainly due to increased sales, marketing and distribution expenses, concurrent with a large increase in machine installations in the period leading to reduced operating profit Enquiries: SnackTime plc Tel: 01189 773 344Blair Jenkins, Chief ExecutiveJulia Brand, Finance Director Arbuthnot Securities Tel: 020 7012 2000Tom Griffiths/Alasdair Younie College Hill Tel: 020 7457 2020Kate Rock/Anthony Parker/Anna Czerny Notes to Editors: - SnackTime plc (AIM: SNAK.L), is the holding company of SnackTime UK, which isone of the UK's largest national operators of snack and chilled drink vendingmachines. The Group has approximately 5,500 installed SEQs located throughoutthe UK, which are serviced by its five main depots located in Cumbernauld (nearGlasgow), Manchester, Alcester, Wokingham and Belfast. Each main depot isresponsible through a team of area managers, merchandisers and engineers forinstalling, maintaining and restocking all of the Group's vending machines. The core element of the Group's business model is that it retains ownership ofthe vending machines, which are sited free on loan and at no cost to the siteowner or occupier. The Group generates cash through sales of products from itsvending machines and also from contributions from its Brand Owners, Mars Snacks, Britvic, PepsiCo (Walkers Crisps) and Coca-Cola. The Group has enerated a sales CAGR of 69 per cent. since incorporation in 2001 and as at theend of November 2007 had an outstanding order book of approximately 1,700 SEQs. SnackTime UK has four main types of vending machines. The Group decides on theappropriate style and size of vending machine which is installed in eachcustomer's site so as to deliver a high level of customer service to maximisesales. The Group's customers include national retailers, such as Matalan, Argos, Homebase and Currys, as well as a large number of offices and factories. SnackTime plc placed 2,083,333 new Ordinary Shares at 144p per share withinstitutional and other investors to raise approximately £3.0 million, the netproceeds of which will be used to fund the next stage of growth for thebusiness. Report of the Chief Executive----------------------------- Snacktime UK Limited is one of the UK's largest national operators of snack andchilled drink vending machines. The company has thousands of customers acrossboth the private and public sector throughout the UK. In the 6 month period to 30 September 2007, turnover was up 32% on the sameperiod last year and the group's PAT was well ahead of the same period lastyear. The business invested in additional sales, marketing and installationstaff during the period which in turn resulted in the customer estate increasing by 20% between March 2007 and September 2007. The company raised over £1m as part of a pre-IPO investment round between Apriland June. As a result of raising these funds, Snacktime UK Limited was able topurchase the vending machines necessary to clear the majority of outstandingcustomer orders and, therefore, Snacktime UK Limited enjoyed the fastest periodof growth in its history. The company also increased its order book from 1,300SEQs in March to 1,700 SEQs by end September and now stands at its highest everlevel. Income Statement Six months to Six months to 30 September 30 September 2007 2006 (Unaudited) (Unaudited) £ £ Revenue 1,806,875 1,364,684 Cost of sales (491,454) (263,343) ------------------------------ Gross profit 1,315,421 1,101,341 Distribution costs (114,724) (69,898) Administrative expenses (1,131,567) (906,634) ----------------------------- Operating Profit 69,130 124,809 Finance income 5,686 - Finance costs (69,367) (71,418) ---------------------------- Profit before tax 5,449 53,391 Income tax expense 11,339 (58,315) ---------------------------- Profit for the financial period 16,788 (4,924) ---------------------------- All of the activities of the company are classed as continuing. The company has no recognised gains or losses other than the results for theperiod as set out above. Balance Sheet 30 September 30 September 2007 2006 (Unaudited) (Unaudited) £ £ ASSETS Non-current assets Property, plant and equipment 2,348,579 1,991,975 Deferred tax asset 139,012 97,089 -------------------------- 2,487,591 2,089,064 Current assets Inventories 567,168 442,882 Trade and other receivables 743,111 271,463 Cash and cash equivalents 312,959 239,429 -------------------------- 1,623,238 953,774 -------------------------- TOTAL ASSETS 4,110,829 3,042,838 -------------------------- LIABILITIES Current liabilities Trade and other payables (776,198) (859,359) Short term borrowings (98,395) (138,486) Current portion of long-term borrowings (274,052) (182,958) --------------------------- (1,148,645) (1,180,803) Non-current liabilities Trade and other payables (108,864) (315,600) Long-term borrowings (1,528,471) (757,468) --------------------------- (1,637,335) (1,073,068) Total liabilities (2,785,980) (2,253,871) ---------------------------- Net assets 1,324,849 788,967 ---------------------------- Capital and reserves Called up equity share capital 1,371,503 1,170,167 Share premium account 84,768 25,274 Equity shares to be issued 91,844 - Retained earnings (223,266) (406,474) --------------------------- Shareholders' funds 1,324,849 788,967 --------------------------- Cash Flow Statement Six months to Six months to 30 September 30 September 2007 2006 (Unaudited) (Unaudited) £ £ Cash flows from operating activities Profit / (Loss) after taxation 16,788 (4,924) Adjustments for: Depreciation 110,407 124,934 Investment income (5,686) - Interest expense 69,367 71,418 Profit on disposal of fixed assets (20,378) - Taxation expense recognised in profit and (11,339) 58,315 loss Increase / (decrease) in trade and other (279,990) 155,560 receivables (Decrease) / increase in trade and other (275,975) 97,012 payables Increase in inventories (89,861) (160,061) -------------------------- Cash generated from operations (486,667) 342,254 Interest paid (69,367) (71,418) Income tax paid - - -------------------------- Net cash from operating activities (556,034) 270,836 -------------------------- Cash flows from investing activities Purchase of property, plant and equipment (279,072) (202,312) Interest received 5,686 - -------------------------- Net cash used in investing activities (273,386) (202,312) -------------------------- Cash flows from financing activities Proceeds from issue of share capital 361,724 - Payments of long-term borrowings 722,565 (8,218) Payments of finance lease liabilities 93,981 (43,464) ------------------------- Net cash used in financing activities 1,178,270 (51,682) ------------------------- Net increase in cash and cash equivalents 348,850 16,842 Cash and cash equivalents at beginning of (35,891) 222,587 period ------------------------- Cash and cash equivalents at end of period 312,959 239,429 ------------------------- Statement of changes in equity Share Share Equity Retained Total capital premium shares earnings Equity to be issued £ £ £ £ £ Balance at 1 April 2006 1,170,167 25,274 - (401,550) 793,891 Loss for the period - - - (4,924) (4,924) -------------------------------------------------Balance at 30 September 2006 1,170,167 25,274 - (406,474) 788,967 ------------------------------------------------- Profit for the period - - - 166,420 166,420 Costs of share issue - (9,050) - - (9,050) ------------------------------------------------- Balance at 31 March 2007 1,170,167 16,224 - (240,054) 946,337 ------------------------------------------------- Profit for the period - - - 16,788 16,788 Issue of share capital 201,336 100,668 - - 302,004 Costs of share issue - (32,124) - - (32,124) Issue of convertible loan - - 91,844 - 91,844notes ------------------------------------------------Balance at 30 September 1,371,503 84,768 91,844 (223,266) 1,324,8492007 ------------------------------------------------ The notes on pages 8 to 13 form part of these financial statements. Notes to the unaudited interim results 1. Adoption of International Financial Reporting Standards (IFRS)----------------------------------------------------------------- For all periods up to 31 March 2007 Snacktime UK Limited has prepared itsfinancial statements in accordance with UK Generally Accepted AccountingPrinciples (UK GAAP). These interim financial statements of Snacktime UK Limited for the period ended 30 September 2007 have been prepared in accordancewith International Financial Reporting Standards (IFRS). The information presented within these interim financial statements is incompliance with IAS 34 'Interim Financial Reporting'. This requires the use ofcertain accounting estimates and requires that management exercise judgement inthe process of applying the Company's accounting policies. The areas involvinga high degree of judgement or complexity, or areas where the assumptions andestimates are significant to the interim financial statements are disclosed inNote 6. In preparing these interim financial statements the comparative figurespreviously reported under UK GAAP have been restated for the transition to IFRS. The disclosures required by IFRS 1 regarding the transition for therelevant periods are given in note 7 below. Unless noted the same accountingpolicies and methods of computation have been followed in the interim financialstatements as compared to the most recent annual financial statements. Snacktime UK Limited has elected not to apply IFRS 3, Business Combinationsretrospectively to past business combinations prior to the date of transition. The financial information contained in this report, which has not been audited,does not constitute statutory accounts as defined by Section 240 of theCompanies Act 1985. The Company's statutory financial statements for the yearended 31 March 2007 were prepared under UK GAAP. The auditors' report for the2007 financial statements was unqualified and did not contain a statement underSection 237 (2) or (3) of the Companies Act 1985. 2. Accounting policies---------------------- (a) REVENUE Sale of GoodsRevenue is measured by reference to the fair value of consideration received orreceivable by the group for goods supplied, excluding VAT and trade discounts.Revenue for goods sold is recognised at the date of sale when the significantrisks and rewards of ownership have transferred to the buyer. Finance incomeInterest is recognised as income as it accrues using the effective interestmethod. (b) COST OF SALES Contributions receivable from suppliers towards the installation andrefurbishment of vending machines is recognised when earned and included as areduction in the cost of sales. (c) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is stated at cost, net of depreciation and anyprovision for impairment. DepreciationDepreciation is calculated so as to write off the cost of an asset, less itsestimated residual value, over the useful economic life of that asset asfollows: Leasehold Improvements - over the term of the leasePlant & Machinery - 10 - 25% straight line basisFixtures & Fittings - 25% straight line basisMotor Vehicles - 25% straight line basis Material residual value estimates are updated as required, but at leastannually, whether or not the asset is revalued. (d) LEASED ASSETS In accordance with IAS 17, the economic ownership of a leased asset istransferred to the lessee if the lessee bears substantially all the risks andrewards related to the ownership of the leased asset. The related asset isrecognised at the time of inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments plusincidental payments, if any, to be borne by the lessee. A corresponding amountis recognised as a finance leasing liability. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over theperiod of the lease. All other leases are regarded as operating leases and the payments made underthem are charged to the income statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease. (e) INVENTORIES Inventories are stated at the lower of purchase cost from third parties and netrealisable value on a first in first out basis. Costs of ordinarilyinterchangeable items are assigned using the first in, first out cost formula. (f) TRADE RECEIVABLES Trade receivables do not carry any interest and are stated at their fair valueson initial recognition as reduced to equal the estimated present value of thefuture cash flows. They are then accounted for at amortised cost using theeffective interest rate method. Provision is made when there is objective evidence that the Company will not beable to recover the balance in full. Balances are written off when theprobability of recovery is assessed as remote. (g) TAXATION Current tax is the tax currently payable based on taxable profit for the year. Deferred income taxes are calculated using the liability method on temporarydifferences. Deferred tax is generally provided on the difference between thecarrying amounts of assets and liabilities and their tax bases. However,deferred tax is not provided on the initial recognition of goodwill, nor on theinitial recognition of an asset or liability unless the related transaction isa business combination or affects tax or accounting profit. Tax lossesavailable to be carried forward as well as other income tax credits to the group are assessed for recognition as deferred tax assets. Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlyingdeductible temporary differences will be able to be offset against futuretaxable income. Current and deferred tax assets and liabilities are calculatedat tax rates that are expected to apply to their respective period ofrealisation, provided they are enacted or substantively enacted at the balancesheet date. Changes in deferred tax assets or liabilities are recognised as a component oftax expense in the income statement, except where they relate to items that arecharged or credited directly to equity (such as the revaluation of land) inwhich case the related deferred tax is also charged or credited directly toequity. (h) FINANCIAL INSTRUMENTS Financial liabilities are obligations to pay cash or other financial assets andare recognised when the group becomes a party to the contractual provisions ofthe instrument. Financial liabilities categorised as at fair value throughprofit or loss are recorded initially at fair value, all transaction costs arerecognised immediately in the income statement. All other financial liabilitiesare recorded initially at fair value, net of direct issue costs. Financial liabilities categorised as at fair value through profit or loss areremeasured at each reporting date at fair value, with changes in fair valuebeing recognised in the income statement. All other financial liabilities arerecorded at amortised cost using the effective interest method, withinterest-related charges recognised as an expense in finance cost in the incomestatement. Finance charges, including premiums payable on settlement orredemption and direct issue costs, are charged to the income statement on anaccruals 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'sbalance sheet when the Company becomes a party to the contractual terms of theinstrument. Bank borrowingsBank loans and overdrafts are initially recorded at fair value net oftransaction costs. Finance charges including premiums payable on settlement orredemption and direct issue costs, are accounted for on an accruals basis to the profit and loss account using the effective interest method and are added to the carrying value of the instrument to the extent that they are not settledin the period in which they arise. Trade payablesTrade payables are not interest bearing and are stated at their fair value oninitial recognition. They are then accounted for using the effective interestrate method. Equity instrumentsEquity instruments issued by the Company are recorded at the proceeds received,net of direct costs. (i) EQUITY 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. • "Retained earnings" represents retained profits. • "Equity shares to be issued" represents the equity portion of the convertible loan notes issued during the period. (j) CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash on hand and demand deposits, togetherwith other short-term, highly liquid investments that are readily convertibleinto known amounts of cash and which are subject to an insignificant risk ofchanges in value. 3. Convertible loan stock------------------------- Convertible loan stock of £855,998 is included in the balance sheet at 30September 2007. Of this £91,844 has been treated as equity shares to be issuedwith the remainder of £764,154 included in long term borrowings. Thisconvertible loan stock bears interest at a rate of 8% per annum. The loan stockis convertible to Ordinary A shares upon flotation at a premium (see 8 below) of 20% of the share price upon flotation. Loan stock is repayable in full on 31December 2008 if flotation has not been achieved. 4. Issue of shares------------------ On 5 June 2007 201,336 Ordinary C shares of £1 each were issued at £1.50 pershare. These shares are convertible to Ordinary A shares upon flotation at apremium of 18% of the share price upon flotation and are non-redeemable.Ordinary C shares have no voting rights and have no dividend entitlement. 5. Post balance sheet events---------------------------- SnackTime plc's ordinary shares of 2p each have been admitted AIM. Its sharescommenced trading at 8.00 am on Wednesday 19 December 2007. Over £3.0 millionwas raised by the placing of new shares with institutional and other investorsat IPO. The proceeds of which, after costs, will be used to fund future growth. On 30 November 2007, Snacktime Limited changed its name to Snacktime UK Limitedand 100% of its share capital was acquired by SnackTime plc. 6. Accounting estimates and judgements-------------------------------------- Estimates and judgements are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that arebelieved 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. 7. Explanation of transition to IFRS------------------------------------ Snacktime UK Limited has previously produced and filed financial statementsunder UK Generally Accepted Accounting Practice (UK GAAP). The Company hasproduced these interim financial statements in accordance with InternationalAccounting Standards (IAS) and International Financial Reporting Standards(IFRS) as adopted by the European Union. Whilst the disclosures and presentation of certain financial information isdifferent under IFRS, there have been no changes to the net profit/(loss) orequity at any of the reporting dates or the transition date of 1 April 2006. The cash flow statements are also the same as under UK GAAP apart frompresentational differences. An explanation of how the transition from UK GAAP to IFRS has effected theCompany's financial position, financial performance and cash flows is set outbelow. IFRS 1 permits companies adopting IFRS for the first time to take certainexemptions from the full requirements of IFRS in the transition period. Theseinterim financial statements have been prepared on the basis of taking thefollowing exemptions: • The Company has elected not to apply IFRS 3, Business Combinations retrospectively to past business combinations prior to the date of transition Explanation of material adjustments to the cash flow statement-------------------------------------------------------------- Application of IFRS has resulted in reclassification of certain items in thecash flow statement as follows: 1) Under UK GAAP, payments to acquire property, plant and equipment were classified as part of 'Capital expenditure and financial investment'. Under IFRS, payments to acquire property, plant and equipment have been classified as part of 'Investing activities' 2) Income taxes received by the Company in respect of Research and Development tax credits are now classified as an operating cash flow under IFRS, however these were included in a separate category of tax cash flows under UK GAAP. 3) There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP. 4) The definition of cash is narrower under UK GAAP than under IAS 7 "Cash Flow Statements". Under IFRS highly liquid investments, readily convertible to a known amount of cash with an insignificant risk of changes in value are regarded as cash equivalents. 8. 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 respectivelyas convertible loans. These loans bear a coupon of 8%, and convert to OrdinaryA shares at IPO at a 20% discount on IPO price (see note 3 above). If theconversion has not taken place by 31 December 2008, then they are repayable. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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