Snacktime PLC Trading Update (9439X)
February 15 2013 - 2:00AM
UK Regulatory
TIDMSNAK
RNS Number : 9439X
Snacktime PLC
15 February 2013
SnackTime plc
15 February 2013
Trading Update
SnackTime PLC ("SnackTime" or the "Company") (AIM: SNAK), the
third largest vending company in the British Isles, today releases
the following trading update regarding the year ending 31 March
2013.
The Company has made considerable progress in its turnaround
over the last 6 months, despite tough market conditions. However,
the Company's trading performance since release of its half year
announcement in November 2012 has fallen significantly short of
market expectations for three key reasons:
-- Sales and margin at its subsidiary VMI, have fallen short of
expectations and whilst reasonably stable, a recovery before the
end of this financial year now looks unlikely.
-- The revised routing plan at VMI has been implemented with
cost savings beginning to show through. However, the process took
longer to complete than had been expected and in particular the
ancillary cost savings around vehicle leases will not materialise
until the next financial year due to contract terms.
-- We have changed our accounting policy in relation to
recognition of brand support income to a more prudent approach than
in prior years.
We are pleased to report continuing progress in reducing costs,
with decisions implemented over GBP1m of overhead savings coming
out of the business. The old Head Office has been closed, as has
the VMI warehouse in Warrington and the necessary transfer of staff
and stock completed. Furthermore, sales have stabilised in 3 of our
4 divisions.
In August 2012, cognisant that the Company might breach one of
the covenants of its banking facility in December 2012, we
approached our bank with a request to extend the term of our loan
and revise our banking covenants. Discussions are still ongoing and
expected to conclude before the end of March 2013. The Company is
operating within its facilities and is confident of a satisfactory
outcome to these discussions.
The Company is in discussions with certain of its larger
shareholders regarding the proposed issue of GBP800k of five year
convertible loan notes to provide funds for the Company. Terms of
the issue have still to be finalised and no agreements are in
place, however Elderstreet VCT plc, a 14% shareholder in the
Company, has indicated its willingness, in principle, to subscribe
for up to 50% of the issue and management have indicated that they
will also participate. The Company expects to be in a position to
make a further announcement in due course.
For further information:
SnackTime PLC
Jeremy Hamer, Chairman
Tim James, Finance Director 0208 879 8300
Westhouse Securities
Tom Griffiths 020 7601 6100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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