RNS Number:2135K
Snacktime PLC
19 December 2007
SnackTime plc
("SnackTime" or "the Company" or "the Group")
Admission to AIM
Shares in SnackTime, the national operator of snack and chilled drink vending
machines, begin trading on AIM today with the trading symbol SNAK.L.
The Company has placed 2,083,333 New Ordinary Shares at 144p per share to raise
approximately �3.0 million, the net proceeds of which will be used to fund the
next stage of growth for the business.
* SnackTime is one of the UK's largest national operators of snack and
chilled drink vending machines and has installed approximately 5,500 SEQs
throughout the UK.
* Arbuthnot Securities Limited is acting as the Group's Nominated Adviser
and Broker.
* At the Placing Price, SnackTime's market capitalisation will be
approximately �10.0 million.
* Founded in 2001, the core element of the Group'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 Group works exclusively with four Brand Owners: Mars Snacks, Britvic,
PepsiCo (Walkers Crisps) and Coca-Cola.
* The Group provides its vending machines to a number of national retailers,
including Matalan, Argos, Currys, PC World, Homebase and Staples.
* The Group generates cash through sales of products from its vending
machines and also contributions from its Brand Owners. For the twelve months
ended 31 March 2007, SnackTime generated audited revenue of approximately
�3.0 million and a profit before tax of approximately �0.2 million.
* SnackTime is seeking to accelerate sales of its vending machines both in
the UK and potentially overseas.
PLACING STATISTICS
Placing Price 144p
Number of New Ordinary Shares being placed on behalf of 2,083,333
the Company
Number of Ordinary Shares in issue immediately following 6,944,573
Admission
Gross proceeds of the Placing �3.0 million
Estimated net proceeds of the Placing receivable by the
Company �2.3 million
Percentage of Enlarged Share Capital being placed
pursuant to the Placing 30.0 per cent
Market capitalisation of the Company at the Placing Price
on Admission �10.0 million
Blair Jenkins, Chief Executive of SnackTime, commented,
"We are delighted that SnackTime has now successfully listed on AIM and welcome
all our new shareholders to the Group. The funds raised will enable SnackTime
to continue to roll out our business model and make considerable inroads into
our current order backlog. We look forward to the coming year with confidence."
Enquiries:
SnackTime plc Blair Jenkins, Chief Executive T: 01189 773 344
Julia Brand, Finance Director
Arbuthnot Securities Tom Griffiths/Alasdair Younie T: 020 7012 2000
College Hill Kate Rock/Anthony Parker/ T: 020 7457 2020
Anna Czerny
Introduction
SnackTime UK is one of the UK's largest national operators of snack and chilled
drink vending machines. The Group has approximately 5,500 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.
The core element of the Group'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 Group 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. The Group has generated a sales
CAGR of 69 per cent. since incorporation in 2001 and as at the end 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 the
appropriate style and size of vending machine which is installed in each
customer's site so as to deliver a high level of customer service to maximise
sales. The Group's customers include national retailers, such as Matalan, Argos,
Homebase and Currys, as well as a large number of offices and factories.
The Directors believe that the Group is well positioned to take advantage of the
anticipated growth in the vending machine market. The Directors believe that the
Placing and Admission will provide funds to enable the Group to purchase
additional vending machines to meet customer demand, reduce the Group's debt and
expand into new sectors.
History and Background
SnackTime UK has its head office in Wokingham, Berkshire and was founded in
September 2001 by Blair Jenkins, the Company's Chief Executive, and Ian Forde,
the Company's Commercial Director. SnackTime UK was founded because Blair
Jenkins and Ian Forde realised that a large number of organisations with less
than 250 employees on site did not have canteens or in-house catering facilities
and, therefore, only offered their staff basic tea and coffee facilities in
staff rooms. They believed that this was particularly the case in the retail
sector where the provision of facilities was considered to be prohibitively
expensive for retailers with a large number of sites. Blair Jenkins and Ian
Forde therefore identified an opportunity to introduce a low-cost model into the
vending machine market and formed SnackTime UK to meet the demand for snack and
food facilities mainly in the workplace. By 2003, SnackTime UK had grown rapidly
and had established national coverage. As at the end of November 2007, there
were approximately 5,500 SnackTime UK installed SEQs in the UK.
The Group's first vending machines were Slimline chocolate and crisp machines
which were mainly sited in retailers' staff rooms. As the business grew, demand
emerged for cold drinks to be sold in the Group's vending machines as well as
snacks. In addition, demand has recently increased for the Group's vending
machines to be placed in the public areas of retailers' sites to serve the
retailers' customers as well as their own staff. Whilst SnackTime UK has to date
specialised in providing vending machines to the retail sector, it now has more
than 1,000 non-retail customers in both the private and public sectors.
SnackTime UK was initially funded privately. However, in July 2003, Elderstreet
first invested
approximately �1 million in SnackTime UK to enable the Group to fund expansion
of the business by acquiring further vending machines to meet customer demand.
Elderstreet made a further investment of approximately �0.35 million in 2006.
Elderstreet subsequently invested approximately �0.1 million as part of an
aggregate fund raising of approximately �1.2 million earlier this year, the
proceeds of which were used by SnackTime UK to acquire more vending machines to
satisfy the demand from its growing order book. As at the end of November 2007,
the Group employed 40 people in sales, marketing and installations, operations,
management and administration.
Business Operations
SnackTime UK is a specialist national vending company operating in the UK. The
core element of the Group'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. Typically, the only cost to the Group's customers for using a
SnackTime UK vending machine is the electricity which the machine uses. However,
the customer is responsible for any damage to a vending machine or any stolen
goods. Currently in Great Britain, SnackTime UK works exclusively with three of
its Brand Owners, Mars Snacks (confectionery), Britvic (soft drinks) and PepsiCo
(Walkers crisps), to stock their products in the Group's vending machines.
The Group's income is generated from two sources. First, the proceeds from the
snacks sold in the Group's vending machines less a commission paid to
approximately 130 self-employed merchandisers who are responsible for servicing
the vending machine, which involves replacing stock and collecting the cash
generated by the vending machine. Secondly, there is a contribution from its
Brand Owners. This contribution is paid in the first year after a machine is
deployed and then further contributions are made during the life of the vending
machine. As well as the initial contribution on deployment of a vending machine,
the Brand Owners also provide additional support via machine graphics and joint
sales and marketing initiatives.
The Group retains ownership of the vending machine and decides which type of
machine is installed in each site, when it is merchandised and generally when it
is removed from a site. The Group determines how often a vending machine should
be serviced and its merchandisers are responsible for ensuring that the vending
machines are fully stocked in order to maximise sales and their own earnings.
The Group purchases all the products to be sold in its vending machines from the
Brand Owners. The products are delivered to its five main depots located across
the UK in Cumbernauld (near Glasgow), Manchester, Alcester, Wokingham and
Belfast while the Group also has smaller distribution centres in Newcastle and
Bristol. The recent addition of the depot in Belfast has presented the Group
with an opportunity to access markets in both Northern Ireland and Eire. The
Group has recently signed an agreement with Coca-Cola to stock its products in
the Group's vending machines in Northern Ireland.
The Group currently has four main types of vending machine, each of which is
briefly described below:
* Slimline - the Slimline was the first machine deployed by the Group in
2001. It is suitable for companies with less than 100 employees, small staff
rooms and can also be sited in corridors. The Slimline can only be located
indoors, but can be powered by both mains electricity and battery. It holds
14 lines of snacks with a mix of confectionery and crisps.
* Combo - the Combo snack and cold can vending machine is ideal for
companies with up to 250 employees, and companies with employees working
shifts, evenings and weekends who need food or drinks at any time. In
addition to the 20 lines of snacks, the Combo contains canned drinks. The
Combo has a full change dispenser, runs on mains electricity and generates
more revenue than the Slimline due to its larger capacity.
* Vendo - the Vendo is the Group's highest product capacity vending
machine and holds approximately 500 confectionery bars. The Vendo
specifically holds confectionery from Mars Snacks and is robust enough to be
deployed indoors or outdoors. It runs on mains electricity and is larger
than the Slimline.
* Snakky - the Snakky is the most recent addition to the Group's range of
vending machines. It stocks snacks, confectionery, chilled cans and bottles.
This wide range of merchandise makes the machine ideal for environments with
high staff numbers and/or consumer usage. The machine is glass fronted, runs
on mains electricity, and provides a full change dispenser.
SnackTime UK buys its vending machines from 5 different suppliers located in
India, US, UK and Italy. The Directors believe that by sourcing vending machines
from multiple suppliers, the Group is able to ensure that it can purchase
vending machines whenever they are required and at prices which are advantageous
to the Group.
The Market
According to Key Note Publications ("Key Note"), there were an estimated 1.3
million vending machines in operation in the UK during 2006, an increase of 3.1
per cent. compared to 2005. Refreshment machines dominate the market with
approximately 0.6 million units. An estimated 65 per cent. of refreshment
machines are either hot beverage and/or cold beverage machines, whilst the
remaining 35 per cent. serve confectionery and snacks. According to data from
Mars Snacks and Key Note, the total spend on snack food and drinks in the UK was
approximately �13 billion in 2006, an increase of 1.6 per cent. compared to
2005.
Key Note estimates that the sale of refreshments, cigarettes and other products
in the UK through vending machines generated revenues of approximately �3.5
billion in 2006. This represents a 2.8 per cent. increase from 2005 and a 13.5
per cent. increase from 2002. Furthermore, refreshment vending machines (hot and
cold beverages, snacks, confectionery, sandwiches and hot and cold meals) were
the largest sector with sales of approximately �2.2 billion in 2006.
Key Note forecasts 11.2 per cent. growth in sales through vending machines
between 2007 to 2011 to over �4 billion per annum. Refreshment sales are
forecast to increase 16.9 per cent. over the same period and are forecast to
account for an estimated 66 per cent. of total annual sales through vending
machines.
The Directors consider that the three largest vending companies operating in the
UK are Autobar Group Limited ("Autobar"), Bunzl Vending Services Limited
("Bunzl") and Selecta Management AG ("Selecta"). Like SnackTime UK these
companies operate a national service. However, there are a number of smaller
vending operators who serve specialised or local markets. Recent consolidation
in the industry includes Bunzl's acquisition of Coffee Point Group Limited for
an undisclosed amount, Autobar's acquisition of 24Seven for an undisclosed
amount and Allianz Capital Partners' acquisition of Selecta for �773 million.
Strategy
The Group has secured a leading position in its supply of snack vending machines
to the out-of-town retail sector on which it has focused since SnackTime UK was
founded. Historically, SnackTime UK has provided vending machines for retail
companies' staff rooms. However, during the last 2 years, SnackTime UK has
successfully started to install its vending machines in the public area of
retailers' sites, making them available for retailers' customers rather than
just their employees. In addition, the Group has installed a large number of
vending machines in small businesses, offices and in factories.
SnackTime UK does not deploy its vending machines in unprotected public
environments such as underground, bus, train or coach stations, or shopping
centres. SnackTime UK also has a small but growing presence in each of the
following business sectors:
* high street retailers;
* hotel and leisure companies; and
* the public sector (such as police and fire stations, hospitals, courts,
local government offices and emergency call centres).
The Group has achieved a sales CAGR of 69 per cent. since SnackTime UK was
incorporated in 2001 relying principally on one sales person and minimal
expenditure on marketing. The Directors believe that there are a number of
significant opportunities for the Group's vending machines in both the public
and private sectors to be exploited. In addition, the Group is intending to
expand further in Northern Ireland and into Eire and mainland Europe.
Sales and Marketing
As at the end of November 2007, SnackTime UK had a sales department of seven
people. It is headed by Ian Forde, the Commercial Director, and consists of a
national account manager, four sales managers and a customer services manager.
To date, a number of customers have been attracted by the Group's offering as a
result of a recommendation or the networking of existing contacts. SnackTime UK
undertakes a small level of cold calling but specifically targets business
parks. One of the reasons why SnackTime UK has been able to win large national
contract business is that in many cases SnackTime UK jointly tenders with its
major brand partners. The Directors believe that these joint tenders
significantly increase the likelihood of SnackTime UK winning new business as
customers are more likely to want to work with a snack machine vending company
that is closely supported by a number of multi-national brand partners.
Customers
The Group has a strong UK customer base, which includes several blue chip
organisations and sector leading companies. As at the end of November 2007, the
Group's vending machines were deployed in over 3,000 customer sites. Its
customer base can be split into two principal areas, retail customers and other
customers. For the year ended 31 March 2007,
SnackTime UK derived 38 per cent. of its revenue from its vending machines sited
at its 5 largest customers, which are all retailers. SnackTime UK currently
provides its vending machines to a number of national retailers, including
Matalan, Argos, Currys, PC World, Homebase, Staples, Wickes/Travis Perkins and
Dunelm Mills. The Group has in most cases exclusive arrangements with all of
these retailers to install its snack vending machines in staff rooms and, in a
number of cases, SnackTime UK has also installed its machines in the public area
of retailers' sites, which increases the number of people using the snack
vending machines as they are available to the general public. Most national
contracts are multi-year contracts and provide the Group with exclusivity to
vend snacks and confectionery in the customers' sites.
Competition
The Directors are not aware of another national snack vending company, or one
which offers a broad-scale solution similar to the Group's free on loan model.
The Directors believe that its competitors primarily operate along traditional
vending lines whereby vending machines are rented to the customer who also pays
for the maintenance and re-stocking of the vending machine. The Directors
believe that on limited occasions traditional vending companies will issue
vending machines free on loan, but this is not normal practice and usually makes
up only a small percentage of their business.
Companies engaged in non-store retail activities are largely concentrated in the
South East, the South West and the North West of England, with a smaller number
of companies operating in the North East and Northern Ireland.
In addition to in-store retail sales of branded products, the Directors believe
that the Group's competitors are companies which operate and maintain vending
machines. This includes companies such as:
* Bunzl, a subsidiary of Bunzl plc, has 15 offices across the UK with more
than 1,000 field engineers maintaining approximately 40,000 machines. In
2006, Bunzl acquired The Midshires Group (a seller of vending machines and
associated services), and more recently acquired Coffee Point Group Limited
(concerned with the sales and operations of vending machines), which has
approximately 14,000 machines supplying hot drinks, snacks and food.
* Until its recent purchase by Allianz Capital Partners for approximately
�773 million, Selecta was part of Compass Group plc and is one of Europe's
leading vending companies, selling over 4 million drinks from approximately
130,000 machines across Europe each day. It has 11 offices in the UK and
Northern Ireland.
* Autobar UK is part of the Autobar Group. It is present in seven
countries across Europe, with over 225,000 vending machines. It recently
acquired Absolute Vending, Springbank Industries, Vendserve Limited and
24Seven, a business with over 14,000 vending machines.
Summary Financial Information
Set out below is a summary of the Group's audited financial information for the
three financial periods ended 31 March 2007, which has been extracted from the
audited historical financial information on SnackTime UK set out in the
Admission Document.
Year ended Eighteen months Year ended
30 September ended 31 March 31 March
2004 2006 2007
�000 �000 �000
Revenue 1,572 3,605 2,999
Gross profit 1,447 2,566 2,432
Profit/(loss) before tax 58 (223) 189
Net (liabilities)/assets (225) 794 946
The financial information set out above for the three financial periods ended
31 March 2007 is stated under IFRS.
Revenue for the year ended 31 March 2007 was approximately �2.9 million
(eighteen months ended 31 March 2006: �3.6 million) and gross profit was
approximately �2.4 million (eighteen months ended 31 March 2006: �2.6 million).
SnackTime UK reported a profit before tax for the year ended 31 March 2007 of
approximately �0.2 million (eighteen months ended 31 March 2006: loss of �0.2
million).
The increased level of revenue and profit reported by the Group for the three
financial periods ended 31 March 2007 has been a direct result of SnackTime UK
winning more business and investing in the necessary number of snack vending
machines to satisfy the increased level of demand. The loss for the 18 months
ended 31 March 2006 was due principally to the increased investment made by the
Group in both personnel and the snack vending machines. The impact of this
investment began to have a positive effect on the Group's results during the
year ended 31 March 2007.
Current Trading and Prospects
Trading to date in the current financial year has exceeded the Directors'
expectations. The Directors believe that the Group is well placed to increase
its revenues and to exploit the current market opportunities that exist.
Consequently, the Board views the Group's future with confidence. The Directors
are encouraged by the trading prospects of the Group both for the current
financial year and for the foreseeable future. The Board is confident that,
following Admission, the Group will be better positioned to take advantage of
the business opportunities that exist in its markets. The Placing and Admission
should provide the funds necessary to enable the Group to continue to expand.
Reasons for Admission and Use of Proceeds
The Company is seeking admission of its Ordinary Shares to trading on AIM to
enable it to fund the next growth phase of the business. The Group is dependent
on capital expenditure through the purchase of new vending machines and the net
proceeds of the Placing will be used primarily to fund the purchase of the
existing style of vending machines and to roll out new styles of vending
machines in order to expand the Group's offering.
Admission is also intended to raise the Group's profile, enhance its credibility
in the market and increase its brand awareness, all of which the Directors
believe will be beneficial when SnackTime UK is tendering for new business.
Furthermore, the net proceeds from the Placing will also enable the Group to
reduce its debt, strengthen its balance sheet and increase free cash flow,
giving the Group increased flexibility to finance future growth. In addition,
Admission will provide the Group's employees with the opportunity to participate
in the future success of the Group and should help to attract and retain high
calibre staff.
Details of the Placing
The Company has raised approximately �3.0 million (before expenses) through a
conditional placing by Arbuthnot Securities of 2,083,333 New Ordinary Shares at
144 pence per share. The New Ordinary Shares will represent approximately 30.0
per cent. of the Enlarged Share Capital following Admission. On Admission, at
the Placing Price, the Company is expected to have a market capitalisation of
approximately �10.0 million.
Following the Placing, the interests, in aggregate, of the Directors will amount
to approximately 31.8 per cent. of the Enlarged Share Capital.
Directors
The Board comprises three executive Directors and two non-executive Directors
(including the non-executive Chairman).
Directors
Michael Jackson, Non-executive Chairman, aged 56, MA, FCA. Michael founded
Elderstreet Investments Limited in 1990 and is its executive Chairman. For the
past 20 years, he has specialised in raising finance and investing in the
smaller companies sector. Michael is Chairman of PartyGaming plc and until
August 2006 was Chairman of FTSE 100 company, Sage Group plc. He is also a
director and investor in many other quoted and unquoted companies, including
Netstore plc and Sky High plc. Michael studied law at Cambridge University, and
qualified as a chartered accountant with Coopers and Lybrand before spending
five years in marketing for various US multinational technology companies.
Michael was appointed non-executive Chairman of SnackTime UK in April 2006 and
is chairman of the Audit Committee.
Blair Jenkins, Chief Executive, aged 48, BSc, MBA. Blair is one of the founders
of SnackTime UK and along with Ian Forde has been responsible for building
SnackTime UK through his extensive sales and marketing background. Blair has
previously worked as a senior sales and marketing manager for Procter & Gamble
and GlaxoSmithKline plc. Following that, he had managing director roles with
Associated British Foods plc, Catalina Marketing Corporation Inc and InterAct
Systems Inc.
Julia Brand, Finance Director, aged 35, BSc, CIMA. Julia joined SnackTime UK as
financial controller in October 2003. She was appointed Finance Director in June
2007. Previously she was financial controller with WickHill plc and QDS
Environmental Limited. Julia qualified as a management accountant in 2003.
Ian Forde, Commercial Director, aged 54. Ian co-founded SnackTime UK with Blair
Jenkins in 2001, and has served as Commercial Director of the Group since that
time. Ian was a senior sales and marketing manager of Procter & Gamble.
Subsequently, Ian was European sales director for Barilla, then Gucci, before
becoming worldwide commercial director of InterAct Systems Inc.
David Lowe, Non-executive Director, aged 53, FCA. David has been a director of
many small and medium sized companies over the last 25 years. He is a
non-executive director of Sky High plc and APT Controls Limited, and is a
majority shareholder and the chairman of Garran Lockers Limited. He represents
Elderstreet as non-executive Chairman of Halifax Industrial Limited. David was
previously a majority shareholder and director of several businesses in the
gravel, transport, engineering and print sectors. David qualified as an FCA in
1977. David was appointed a non-executive Director of SnackTime UK in April
2006. David is a director of Elderstreet Investments Limited, Elderstreet
Private Equity Limited, Elderstreet Holdings Limited and ARC Growth Company VCT
plc.
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
"Admission" the admission of the Ordinary Shares to
trading on AIM becoming effective in
accordance with the AIM Rules
"AIM" the market of that name operated by London
Stock Exchange plc
"Arbuthnot Securities" Arbuthnot Securities Limited, the Company's
nominated adviser and broker
"Argos" Argos Limited
"Board" or "Directors" the directors of the Company, whose names are
set out above
"Brand Owners" Mars Snacks, Britvic, PepsiCo and Coca-Cola
"Britvic" Britvic plc
"CAGR" compound annual growth rate
"Coca-Cola" Coca-Cola Bottlers (Ulster) Limited
"Company" SnackTime plc, the holding company of the
Group
"Currys" Currys Group Limited, a wholly owned
subsidiary of DSG International plc
"Dunelm Mills" Dunelm (Soft Furnishings) Limited
"Elderstreet" Elderstreet VCT plc and/or Elderstreet
Millenium VCT plc, as the context requires
"Enlarged Share the 6,944,573 Ordinary Shares in issue
Capital" immediately following Admission
"Group" the Company and all or any of its subsidiaries
or in the period to 29 November 2007,
SnackTime UK
"Homebase" Homebase Limited
"IFRS" International Financial Reporting Standards
"Mars Snacks" Mars Snackfoods UK
"Matalan" Matalan Retail Limited
"New Ordinary Shares" the 2,083,333 new Ordinary Shares subscribed
for by Placees under the Placing
"Ordinary Shares" the ordinary shares of 2p each in the capital
of the Company and "Ordinary Share" shall be
construed accordingly
"PC World" PC World UK Limited, a wholly owned subsidiary
of DSH International plc
"PepsiCo" PepsiCo UK & Ireland
"Placees" the subscribers or purchasers of Placing
Shares pursuant to the Placing
"Placing" the conditional placing by Arbuthnot
Securities on behalf of the Company of the New
Ordinary Shares
"Placing Price" 144p per Placing Share
"SEQs" Slimline equivalents, the Group's measurement
of numbers of machines
"SnackTime UK" SnackTime UK Limited, a wholly owned
subsidiary of the Company
"Staples" Staples UK retail Limited
"Subsidiary" as defined in section 736 and 736A of the
Companies Act
"UK" the United Kingdom of Great Britain and
Northern Ireland
"UK GAAP" United Kingdom Generally Accepted Accounting
Principles
"US", "USA" or United States of America, its territories and
"United States" possessions and any state of the US or the
District of Columbia and all other areas
subject to its jurisdictions
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUWRBRBARUAAA
Uvenco Uk (LSE:UVEN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Uvenco Uk (LSE:UVEN)
Historical Stock Chart
From Jul 2023 to Jul 2024
