21st Nov 2008 14:34
21 November 2008
SNACKTIME PLC
("SNACKTIME" or the "COMPANY")
Placing of New Ordinary Shares, Issue of Convertible Loan Notes,
Notice of Extraordinary General Meeting
and
Trading Update
The Company announces that it proposes to raise £0.42 million (before expenses) (the "Placing") through the issue of 466,667 New Ordinary Shares (the "Placing Shares") at a price of 90p per share ("Placing Price"). In addition the Company has raised £0.6 million through the issue of the Convertible Loan Notes. The Company intends to invest the net proceeds of the Placing and the Convertible Loan Notes to fund the acquisition of snack and chilled drink vending machines.
The Placing Price represents a discount of approximately 5.6 per cent. to the closing mid-market price of 90 pence per Existing Ordinary Share on 20 November 2008, being the last dealing day prior to the date of this announcement. The Placing Shares will represent approximately 6.3 per cent. of the Company's Enlarged Ordinary Share Capital.
The Placing Shares have been conditionally placed by Arbuthnot with institutional investors. Subject, inter alia, to the passing of the Resolutions at the Extraordinary General Meeting on 15 December 2008, Admission and dealings in the Placing Shares are expected to commence on AIM on 16 December 2008.
The Company expects to announce its unaudited interim results for the six months ended 30 September 2008 in December 2008. The Company has continued to experience rapid growth in its vending machine estate and the number of SEQs as at 30 September 2008 was approximately 7,800 compared to approximately 6,500 as at 1 April 2008. The Company has continued to win new customers, including Northamptonshire Police and Travel Inn and has successfully started to install vending machines in Northern Ireland.
There has been an increase in the number of recycled machines as the Directors continue to concentrate on maximizing yields from the existing estate. However, the Directors believe that the Company is well placed to withstand the expected economic slowdown in the UK and that the Company's business model will continue to enable it to flourish in the short to medium term.
Blair Jenkins, CEO commented:
"Trading in the first half of the year was strong and the company was able to win a number of new clients enabling it to significantly increase the size of our estate. The placing and the issue of the convertible loan notes will give the company the financial flexibility it requires to continue its current rate of growth."
ENQUIRIES
SnackTime plc
Blair Jenkins, CEO Tel. 0118 977 3344
Arbuthnot
Tom Griffiths/Alasdair Younie Tel. 0207 012 2000
Introduction
The Company announces that it proposes to raise £0.42 million (before expenses) by way of a conditional placing of 466,667 new Ordinary Shares at a price of 90p per share. Furthermore, the Company has also raised £0.6 million through the issue of the Convertible Loan Notes (a summary of the principal terms and conditions of which are set out below). The net proceeds of the Placing and the Convertible Loan Notes will be used to fund the acquisition of snack and chilled drink vending machines.
The Placing Shares have been conditionally placed with institutional investors. Subject, inter alia, to the passing of the Resolutions at the EGM, Admission and dealings in the Placing Shares are expected to commence on AIM on 16 December 2008.
The Company
The Company's shares were admitted to trading on AIM on 19 December 2007. At the same time, the Company raised £3.0 million before expenses pursuant to a placing of 2,083,333 ordinary shares at 144p per share. The net proceeds of the placing were used to fund the next growth phase of the business.
SnackTime is one of the UK's largest national operators of snack and chilled drink vending machines. The Company has four types of vending machine and has approximately 7,800 installed SEQs located throughout the UK which are serviced by its five main depots. The core element of the Company's business model is that it retains ownership of the vending machines, which are sited free on loan and at no cost to the site owner or occupier.
The Company generates cash through sales of products from its vending machines and also from contributions from its Brand Owners, Mars Snacks, Britvic, PepsiCo (Walkers Crisps) and Coca-Cola. SnackTime's customers include companies such as Matalan Retail Limited, Homebase Limited and Argos Limited.
Reasons for the Placing and the Convertible Loan Notes
Since inception the Company has experienced rapid growth both in terms of the number of its installed SEQs and its financial results. In August 2008, the Company reported its maiden preliminary results as a public company for the year ended 31 March 2008, which were ahead of market expectations.
This growth has been funded by a combination of cash flows from trading activities, investor funding, bank debt and the hire purchase ("HP") market. Since the worsening of the banking crisis in the third quarter of this year, the availability and cost of both HP and bank finance has been considerably more difficult to obtain at sensible market rates. The Company considers that it now needs to alter the balance of its funding sources in order to continue to finance the growth of the Company's estate of SEQs. The Directors believe that the net proceeds of the Placing and the issue of the Convertible Loan Notes is the optimum way to continue to fund the Company's growth in the current macroeconomic environment.
Details of the Placing
The Company proposes to raise £0.42 million (before expenses) through the issue of the Placing Shares at the Placing Price. The Placing Price represents a discount of approximately 5.6 per cent. to the closing mid-market price of 95 pence per Existing Ordinary Share on 20 November 2008, being the last dealing day prior to the announcement of the Placing. The Placing Shares will represent approximately 6.3 per cent. of the Company's Enlarged Ordinary Share Capital.
Pursuant to the terms of the Placing Agreement, Arbuthnot, as agent for the Company, has agreed conditionally to procure subscribers for the Placing Shares at the Placing Price. The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the EGM and Admission becoming effective on or before 8.00 a.m. on 16 December 2008 (or such later time and/or date as the Company and Arbuthnot may agree, but in any event no later than 3.00 p.m. on 30 December 2008). The Placing Agreement contains provisions entitling Arbuthnot to terminate the Placing Agreement at any time prior to Admission in certain circumstances. If this right is exercised, the Placing will not proceed. The Placing has not been underwritten by Arbuthnot.
Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares on AIM will commence on 16 December 2008.
The Placing Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared following Admission. It is expected that CREST accounts will be credited on the day of Admission and that share certificates (where applicable) will be despatched by 23 December 2008.
Details of the Convertible Loan Notes
The principal terms and conditions of the Convertible Loan Notes are as follows;
the nominal amount of the Convertible Loan Notes shall be £1; Unicorn's principal amount shall be £0.55 million and Elderstreet's £50,000;
any Notes not converted shall be redeemed on 16 December 2013; the Noteholders at their discretion shall be entitled to convert any Notes into new Ordinary Shares in the Company at any time from 16 December 2011;
interest on the Notes shall accrue at 8 per cent. per annum and shall be paid to the Noteholders semi-annually; and
any Notes outstanding and not redeemed on 16 December 2013 shall be converted into Ordinary Shares.
A copy of the draft Convertible Loan Note Instruments will be available for inspection at the Company's registered office, Unit 7, Station Industrial Estate, Oxford Road, Wokingham, Berkshire RG41 2YQ, from the date of this announcement to the time and date of the EGM and at the offices of Arbuthnot at Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR for 15 minutes prior to and during the EGM.
Related Party Transactions
As part of the Placing, Elderstreet (a substantial shareholder in the Company, as defined in the AIM Rules) has agreed to subscribe for 55,556 New Ordinary Shares and has agreed to invest £50,000 by way of the Convertible Loan Notes. Unicorn (a substantial shareholder in the Company, as defined in the AIM Rules) has agreed to invest £0.55 million in the Company by way of the Convertible Loan Notes. Each of the above transactions is classified as a transaction with a related party for the purposes of the AIM Rules.
In accordance with the AIM Rules, the Directors, excluding Michael Jackson and David Lowe, having consulted with the Company's nominated adviser, Arbuthnot, consider that the terms of the transaction (namely the intended investment by Elderstreet in the Company) are fair and reasonable insofar as Shareholders are concerned.
In accordance with the AIM Rules, the Directors having consulted with the Company's nominated adviser, Arbuthnot, consider that the terms and conditions of the Convertible Loan Notes and the issue of the Notes to Unicorn are fair and reasonable insofar as Shareholders are concerned.
Extraordinary General Meeting
The EGM will be held at the offices of Arbuthnot at Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR on 15 December 2008 at 10.00 a.m., at which the Resolutions will be proposed.
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise:
|
"1985 Act" |
the Companies Act 1985, as amended |
|
"2006 Act" |
the Companies Act 2006, as amended |
|
"Admission" |
the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules |
|
"AIM" |
the Alternative Investment Market operated by the London Stock Exchange |
|
"AIM Rules" |
the rules of AIM governing admission to and the operation of AIM for AIM companies and their nominated advisers as published by the London Stock Exchange from time to time |
|
"Arbuthnot" |
Arbuthnot Securities Limited, the Company's nominated adviser and broker |
|
"Brand Owners" |
Mars Snacks, Britvic, PepsiCo and Coca Cola |
|
"Britvic" |
Britvic plc |
|
"Coca-Cola" |
Coca-Cola Bottlers (Ulster) Limited |
|
"Company" or "SnackTime" |
SnackTime plc |
|
"Convertible Loan Notes" or "Notes" |
the £0.55 million convertible unsecured loan notes to be created by the Convertible Loan Note Instruments |
|
"Convertible Loan Note Instruments" |
the draft convertible loan note instruments to be entered into between the Company and the Noteholders following the EGM |
|
"CREST" |
the relevant system (as defined in the Uncertificated Securities Regulations) of which Euroclear is the operator (as defined in the Uncertificated Securities Regulations) |
|
"Directors" or "Board" |
the directors of the Company |
|
"EGM" or "Extraordinary General Meeting" |
the extraordinary general meeting of the Company convened for 10.00 a.m. on 15 December 2008 |
|
"EGM Notice" |
the notice convening the EGM |
|
"Elderstreet" |
Elderstreet VCT plc |
|
"Enlarged Ordinary Share Capital" |
the Existing Ordinary Shares and the New Ordinary Shares in issue immediately following Admission |
|
"Euroclear" |
Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales, the operator of CREST |
|
"Existing Ordinary Shares" |
the 6,991,892 Ordinary Shares of 2p each in the capital of the Company in issue at the date of this announcement |
|
"Form of Proxy" |
the form of proxy enclosed with the shareholder circular for use in connection with the EGM |
|
"London Stock Exchange" |
London Stock Exchange plc |
|
"Mars Snacks" |
Mars Snackfoods UK |
|
"New Ordinary Shares" |
the 466,667 new Ordinary Shares proposed to be issued pursuant to the Placing at the Placing Price |
|
"Noteholders" |
Unicorn and Elderstreet |
|
"Ordinary Shares" |
the ordinary shares of 2p each in the capital of the Company |
|
"PepsiCo" |
PepsiCo UK & Ireland |
|
"Placing" |
the conditional placing by Arbuthnot of the Placing Shares pursuant to the Placing Agreement |
|
"Placing Agreement" |
the conditional agreement dated 21 November 2008 between the Company and Arbuthnot relating to the Placing |
|
"Placing Price" |
90p per Placing Share |
|
"Placing Shares" |
the New Ordinary Shares |
|
"Resolutions" |
the resolutions set out in the EGM Notice |
|
"SEQs" |
Slimline equivalents, the Company's measurement of numbers of vending machines |
|
"Shareholders" |
holders of Ordinary Shares |
|
"Uncertificated Securities Regulations" |
the Uncertificated Securities Regulations 2002 (SI 2001/3755) |
|
"Unicorn" |
Unicorn VCT plc |
|
"United Kingdom" or "UK" |
the United Kingdom of Great Britain and Northern Ireland |
END
Related Shares:
Uvenco Uk