25th Jan 2005 07:00
Scott Tod PLC25 January 2005 FOR RELEASE 7.00 AM 25 January 2005 Scott Tod Plc ("Scott Tod or "the Company") (Deployment and processing of ATMs and a developer and manufacturer of card vending and change machines) Trading Update Costs of expanding ATM estate rapidly and slower revenue growth to mean second half results likely to be substantially below market expectations Unaudited management accounts for the half year to the 31 December 2004 indicatethat, profit before tax, exceptional items and goodwill amortisation for thehalf year ending 31 December 2004 will be broadly in line with management'sexpectations. However the current level of expenditure being incurred inexpanding the installed ATM estate, coupled with a slower than anticipatedgrowth in transaction revenues, suggests that the results for the second half ofthe year will be substantially below market expectations. The installed ATM base has continued to grow with 2,466 ATMs installed at 31December 2004. New business orders remained healthy and the Company now expectsto have in excess of 3,000 ATMs in place by the year ending 30 June 2005, upfrom 1947 ATMs at 30 June 2004. This reflects in part contracts previouslyannounced and new contract wins. Management had originally considered that moreof these would be installed in the first half but customer delays andcomplications with the 3DES and EMV ('chip n pin') upgrades has bunched theseinto the second half. The rapid growth in the orders for ATMs has resulted in a substantial increasein running costs associated with the orders, installation and related costs butthe trend of transaction revenues in December, which were below expectations,suggests that transactions across the Link network have been affected by adversepublicity surrounding charges by cash machines and that it will take longer forthe increased ATM estate revenues to grow than previously anticipated. A programme of review has been initiated with a view to identifying areas ofcost that can be trimmed once the current expansion phase is completed and theBoard believes that, with its projected much-increased ATM estate as at 30 June2005, it will deliver a much improved performance in the year commencing 1 July2005. Under the terms of the reverse takeover in November 2003 the Scott Tod vendorswere to receive between 1 and 10,000,000 further ordinary shares in Scott Tod ifprofits before tax and amortisation of goodwill for the year to 30th June 2005fell in a range of £875,000 to £1,750,000. While the actual earn-out will bemeasured by the audited results, the Board currently considers it unlikely thatmany, if any, shares will be issued under the earn-out. A further update on the Company's performance will be given at the time theinterim results are released at the end of February 2005. For further information: Scott Tod PlcDavid Massie (Chairman) 020 7389 1770Nicholas Tod (Chief Executive) 01873 811 634 Beattie FinancialBrian Coleman Smith / John Moriarty / Grace Marriner 020 7398 3300 07802 724 400 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SCD.L