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Interim results for the six months ended 30 June 2017

Interim Results

 

Uvenco UK plc today announces its unaudited interim results for the six months ended 30 June 2017.

 

 

I am pleased to report the unaudited results of Uvenco UK plc for the six months ended 30 June 2017.

 

Financial Highlights*

 

-     Turnover decreased by 8.5% to £6,861,000 (H1 2016 : £7,496,000)

 

-     Operating profit before depreciation and amortisation (Adjusted EBITDA**) increased to £283,000

(H1 2016: loss of £1,373,000)

 

-     Net cash outflow from operating activities improved significantly to £613,000 (H1 2016: outflow of  £1,906,000)

 

 

 

comparative figures for the 6 month period to 30 June 2016, following the change of year-end in 2016 from 30 September to 31 December

 

** Adjusted EBITDA is defined as profit before finance income and charges, depreciation, exceptional items, amortisation and loss on disposal of fixed assets and tax

 

Operations and Strategy

 

During the six months to 30 June 2017, we have continued our progress with reshaping and turning around the business. Following the success of the Midlands Depot change in the product delivery chain we have now extended the initiative to the Northern Depot as well. Our operators and merchandisers receive their weekly stock directly to their vans allowing us to decrease the warehousing capacity and labour costs while also reducing working capital. The lease on the Northern Depot expires at the end of 2017, giving us further opportunities for rationalisation.

 

Our 24U application is being rolled out within the NHS, with the latest Queen Elizabeth NHS deal partly refinanced through a sub lease facility.  We have continued investing in the sales force further increasing our headcount in London with two additional senior professionals.

 

The Group has received a non-binding offer for the sale and lease back of the Drinkmaster premises in Cornwall. Should the deal progress according to management's expectation, we will be able to reduce the Group's debt by £450,000.

 

The Snack in The Box division is scheduled to participate in the national franchising exhibition in Birmingham in mid-October 2017 while trialling a scheme to attract new franchisees and distributors in regions which have historically not been covered.      

 

Jeremy Hamer

Chairman

29 September 2017

 

 

 

 

Sergei Kornienko, Chief Executive Officer, commented: "Every day hundreds of people start their day with a cup of Uvenco coffee from Uvenco coffee machines. We dedicate all our time and efforts to ensure that they enjoy these moments by constantly focusing on quality and sustainability. Brexit uncertainty and the sterling exchange rate do add some pressure on our business but this is common to the whole British economy."  

 

 

 

For further information:

 

Uvenco UK plc  

Sergei Kornienko, CEO                                                  0208 879 8300

Peter Goodman, CFO                            

 

Stockdale Securities Ltd.

Tom Griffiths                                                                  020 7601 6100

Richard Johnson

 

Copies of this half yearly financial report are available on the Company's website www.uvenco.co.uk

 

 

 

UVENCO UK PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD ENDED 30 JUNE 2017

 

 

 

 

 

Note

Six months

 

9 months

 

Six months

 

 

 

 

to 30 Jun 17

 

to 31 Dec 16

 

to 30 Jun 16

 

 

 

 

(Unaudited)

 

(Audited)

 

(Unaudited)

 

 

 

 

 

 

Restated

 

Restated

 

 

 

 

£000

 

£000

 

£000

 

 

Revenue

 

6,861

 

10,857

 

7,496

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(3,023)

 

(4,731)

 

(3,336)

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

3,838

 

6,126

 

4,160

 

 

 

 

 

 

 

 

 

 

 

Distribution and administration expenses 

 

(4,072)

 

(6,869)

 

(6,391)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

283

 

324

 

(1,373)

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

(350)

 

(566)

 

(176)

 

 

Amortisation

 

(21)

 

(51)

 

105

 

 

Loss on disposal of fixed assets

 

(40)

 

(345)

 

307

 

 

Exceptional items

7

(106)

 

(105)

 

(1,094)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

(234)

 

(743)

 

(2,231)

 

 

 

 

 

 

 

 

 

 

 

Exceptional profit

 

-

 

1,571

 

-

 

 

Finance costs

 

(235)

 

(407)

 

(71)

 

 

Loss before tax

 

(469)

 

421

 

(2,302)

 

 

 

 

 

 

 

 

 

 

 

Income tax credit/(charge)

 

-

 

(67)

 

(51)

 

 

 

 

 

 

 

 

 

 

 

Loss for the financial period

 

(469)

 

354

 

(2,353)

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

(469)

 

354

 

(2,353)

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

5

(0.6)p

 

0.5p

 

(3.2)p

 

 

Diluted loss per share

5

(0.6)p

 

0.5p

 

(3.2)p

 

 

 

All of the activities of the Company are classed as continuing.

 

The Company has no recognised gains or losses other than the results for the period as set out above.

 

Both the loss and the total comprehensive income for the above periods are attributable in totality to the Equity holders of the Company.

 

UVENCO UK PLC

CONSOLIDATED BALANCE SHEET

AT 30 JUNE 2017

 

 

 

Note

30-Jun

 

31-Dec

 

30-Jun

 

 

2017

 

2016

 

2016

 

 

(Unaudited)

 

(Audited)

 

(Unaudited)

 

 

£000

 

£000

 

£000

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

 

2,410

 

2,914

 

3,311

Intangible assets

 

699

 

719

 

824

 

 

3,109

 

3,633

 

4,135

Current assets

 

 

 

 

 

 

Inventories

 

1,161

 

897

 

1,036

Receivables and prepayments

 

1,926

 

1,802

 

1,779

Cash and cash equivalents

 

144

 

289

 

(352)

 

 

3,231

 

2,988

 

2,463

TOTAL ASSETS

 

6,340

 

6,621

 

6,598

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

(3,437)

 

(3,604)

 

(3,955)

Short term borrowings

 

(1,187)

 

(1,312)

 

(1,099)

Provisions

 

-

 

-

 

-

 

 

(4,624)

 

(4,916)

 

(5,054)

Non-current liabilities

 

 

 

 

 

 

Deferred tax liability

 

(224)

 

(224)

 

(239)

Long-term borrowings

 

(979)

 

(499)

 

(1,095)

 

 

(1,203)

 

(723)

 

(1,334)

 

 

 

 

 

 

 

Total liabilities

 

(5,827)

 

(5,639)

 

(6,388)

 

 

 

 

 

 

 

Net assets

 

513

 

982

 

210

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Equity share capital

 

1,529

 

1,529

 

1,492

Share premium account

 

12,796

 

12,796

 

12,722

Share option reserve

 

375

 

375

 

375

Capital redemption reserve

 

1,274

 

1,274

 

1,274

Warrant reserve

 

2,236

 

2,236

 

2,236

Retained earnings

 

(17,697)

 

(17,228)

 

(17,889)

 

 

 

 

 

 

 

TOTAL EQUITY

 

513

 

982

 

210

 

 

UVENCO UK PLC

CONSOLIDATED CASHFLOW STATEMENT

PERIOD ENDED 30 JUNE 2017

 

 

 

Six months

 

Six months

 

to 30 Jun 17

 

to 30 Jun 16

 

(Unaudited)

 

(Unaudited)

 

£000

 

£000

Cash flows from operating activities

 

 

 

Loss before taxation

(469)

 

(2,302)

Exceptional items

106

 

1,094

Loss before taxation and exceptional items

(363)

 

(1,208)

  Depreciation

350

 

176

  Amortisation

21

 

(105)

  Finance costs

235

 

71

Loss on disposal of fixed assets

40

 

(307)

 

 

 

 

Operating cashflow pre-exceptional costs

283

 

(1,373)

Exceptional Items

(106)

 

(1,094)

 

 

 

 

Operating cash flow post-exceptional costs

177

 

(2,467)

(Increase)/Decrease in inventories

(264)

 

91

(Increase)/Decrease in trade and other receivables

(124)

 

142

(Increase)/Decrease in trade and other payables

(167)

 

450

Cash generated/(used) from operations

(378)

 

(1,784)

 

 

 

 

Interest paid

(235)

 

(71)

Tax paid

-

 

(51)

 

 

 

 

Net cash outflow from operating activities

(613)

 

(1,906)

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

114

 

1,309

Net cash used in investing activities

114

 

1,309

 

 

 

 

Cash flows from financing activities

 

 

 

New loans/(Payments) of long-term borrowings

480

 

(228)

Movement in short-term borrowings

(126)

 

151

Shares issued in period

-

 

45

Net cash received/(used) in financing activities

354

 

(32)

 

 

 

 

Net decrease in cash and cash equivalents

(145)

 

(629)

Cash and cash equivalents at start of period

289

 

277

Cash and cash equivalents at end of period

144

 

(352)

 

 

 

 

UVENCO UK PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

PERIOD ENDED 30 JUNE 2017

 

 

 

 

Share Capital

Share Premium

Capital Redemption Reserve

Share Option Reserve

Warrant Reserve

Retained Earnings

Total Equity

 

£000

£000

£000

£000

£000

£000

£000

Balance at 1 April 16

1,492

12,721

1,274

375

2,236

(17,582)

516

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

1,095

1,095

 

 

 

 

 

 

 

 

Balance at 30 September 2016

1,492

12,721

1,274

375

2,236

(16,487)

1,611

 

 

 

 

 

 

 

 

Issue of shares (net of proceeds)

37

75

-

-

-

-

112

Loss for the period

-

-

-

-

-

(741)

(741)

 

 

 

 

 

 

 

 

Balance at 31 December 2016

1,529

12,796

1,274

375

2,236

(17,228)

982

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(469)

(469)

 

 

 

 

 

 

 

 

Balance at 30 June 2017

1,529

12,796

1,274

375

2,236

(17,697)

513

 

 

UVENCO UK PLC

NOTES TO THE INTERIM FINANCIAL STATEMENTS

PERIOD ENDED 30 JUNE 2017

 

 

1. GENERAL INFORMATION

 

Uvenco UK plc is a public limited company incorporated in England and Wales under the Companies Act 2006 (registered number 06135746). The Company is domiciled in the United Kingdom and its registered address is 17 Rufus Business Centre, Ravensbury Terrace, London, SW18 4RL. The Company's shares are traded on the AIM market of the London Stock Exchange.

 

The principal activities of the Group is the sale and operation of hot drink and snack vending machines, the operation of free on loan vending machines via a franchise division and the production and supply of "in-cup" drinks and associated equipment.

 

2. BASIS OF ACCOUNTING

 

These interim financial statements for the period ended 30 June 2017 have been prepared in accordance with International Financial Reporting Standards (IFRS). The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings. The merger method of accounting has been adopted, following a group reconstruction involving Uvenco UK plc and SnackTime UK Limited. The acquisition of Snack in a Box Limited was accounted for using acquisition accounting in accordance with IFRS 3 "Business Combinations".  The acquisition of Vendia UK Limited was accounted for using acquisition accounting in accordance with IFRS 3 "Business Combinations".

 

All companies in the Group use sterling as presentational and functional currency.

 

The information presented within these interim financial statements is in compliance with IAS 34 'Interim Financial Reporting'. This requires the use of certain accounting estimates and requires that management exercise judgement in the process of applying the Company's accounting policies. The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the interim financial statements are disclosed below.

 

SnackTime UK Limited has elected not to apply IFRS 3, Business Combinations retrospectively 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 434 of the Companies Act 2006. The Company's statutory financial statements for the period ended 31 December 2016, prepared under IFRS have been filed with the Registrar of Companies.

 

 

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

-     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.

 

-     The Directors have estimated the useful economic lives of intangible assets. The economic lives and the amortisation rates are reviewed annually by the directors.

 

-     The Group receives branding fees to contribute to 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.

 

-     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.

 

4. REVENUE

 

Revenue is measured by reference to the fair value of consideration received or receivable by the group for goods and services supplied, excluding VAT and trade discounts.  Revenue for goods sold from vending machines is recognised at the date of sale. Revenue in respect of installation and refurbishment of branded vending machines is recognised at the date of installation or refurbishment. Franchising fees are recognised when the franchisee starts trading. Managed estate sales are recognised in full once the customer has taken over operation of the machine.

 

5. LOSS/EARNINGS PER SHARE

 

Earnings per share is calculated on the basis of profit for the period after tax, divided by the weighted average number of shares in issue for the period ended 30 June 2017 of 76,464,119 (H1 2016 - 74,246,459).

 

 

6. SEGMENT INFORMATION

 

The Group has three main reportable segments:

 

-     Specialist drinks - The manufacture and sale of single portion beverages called 'Drinkpacs' together with the sale of associated food and drink products.

 

-     Franchising - The marketing and franchising of operations in the provision of snack solutions.

 

-     Vending - Vending activities.

 

 

Factors that management used to identify the Group's reportable segments

 

The Group's reportable segments are strategic business units that offer different products and services.  They are managed separately because each business requires different technology and marketing strategies.

 

Measurement of operating segment profit or loss, assets and liabilities

 

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

 

The Group evaluates performance on the basis of profit or loss from operations but excluding non-recurring profits/losses, such as goodwill impairment, and the effects of share-based payments.

 

Inter-segment sales are priced on the same basis as sales to external customers, with an appropriate discount being applied to encourage use of group resources at a rate acceptable to local tax authorities.  This policy was applied consistently throughout the period.

 

Segment assets exclude tax assets and assets used primarily for corporate purposes.  Segment liabilities exclude tax liabilities.  Loans and borrowings are allocated to the segments based on relevant factors (e.g. funding requirements).  Details are provided in the reconciliation from segment assets and liabilities to the Group position.

 

 

Segmental Profit & Loss

Specialist drinks

Franchising

Vending

 

Total

Six months to 30 June 2017

2017

2017

2017

 

2017

 

£

£

£

 

£

 

 

 

 

 

 

Revenue

 

 

 

 

 

Total revenue

1,226

557

5,312

 

7,095

Inter-segmental revenue

-

-

(235)

 

(235)

Group's revenue per consolidated

1,226

557

5,077

 

6,860

statement of comprehensive income

 

 

 

 

 

Depreciation

(92)

(41)

(218)

 

(351)

Amortisation 

-

(21)

-

 

(21)

Operating profit/(loss) before exceptional items

(5)

227

(109)

 

113

 

 

 

 

 

 

Exceptional costs included within administration expenses and finance expense

 

(106)

Head office costs

 

 

 

 

(241)

Finance expense

 

 

 

 

(235)

Group loss before tax

 

 

 

 

(469)

 

 

 

 

 

Segmental Profit & Loss

Specialist drinks

Franchising

Vending

 

Total

Six months to 30 June 2016

2016

2016

2016

 

2016

 

£

£

£

 

£

 

 

 

 

 

 

Revenue

 

 

 

 

 

Total revenue

1,795

622

5,450

 

7,867

Inter-segmental revenue

(371)

-

-

 

(371)

 

 

 

 

 

 

Group's revenue per consolidated

1,424

622

5,450

 

7,496

statement of comprehensive income

 

 

 

 

 

Depreciation

(88)

(35)

(53)

 

(176)

Amortisation 

-

105

-

 

105

Impairment

 

 

 

 

-

Segmental operating loss/(profit) before  

(54)

55

1,323

 

1,324

exceptional items

 

 

 

 

 

Exceptional costs included within administration expenses and finance expense

 

(1,094)

Head office costs

 

 

 

 

(2,461)

Finance expense

 

 

 

 

(71)

Group loss before tax

 

 

 

 

(2,302)

 

 

Segmental Balance Sheet

Specialist drinks

Franchising

Vending

Head office

Total

30 June 2017

2017

2017

2017

2017

2017

 

£

£

£

£

£

 

 

 

 

 

 

Additions to non-current assets

42

-

237

-

279

 

 

 

 

 

 

Total Group assets

1,076

208

8,144

(3,088)

6,340

 

 

 

 

 

 

Reportable segment liabilities

(661)

(180)

(3,108)

(774)

(4,723)

 

 

 

 

 

 

Loans and borrowings (excluding leases, loan notes and overdrafts)

 

(879)

Deferred tax liabilities

 

 

 

 

(224)

Total Group liabilities

 

 

 

 

(5,826)

 

 

 

Segmental Balance Sheet

Specialist drinks

Franchising

Vending

Head office

Total

30 June 2016

2016

2016

2016

2016

2016

 

£

£

£

£

£

 

 

 

 

 

 

Additions to non-current assets

42

-

32

7

81

 

 

 

 

 

 

Total Group assets

1,220

(686)

4,620

1,445

6,599

 

 

 

 

 

 

Reportable segment liabilities

(568)

(310)

(2,549)

(961)

(4,388)

 

 

 

 

 

 

Loans and borrowings (excluding leases, loan notes and overdrafts)

 

(1,762)

Deferred tax liabilities

 

 

 

 

(239)

Total Group liabilities

 

 

 

 

(6,389)

 

 

7. EXCEPTIONAL COSTS

 

 

6 months ended 30 June 2017

 

6 months ended 30 June 2016

 

£000

 

£000

 

 

 

 

Redundancy and reorganisation

(106)

 

(951)

Costs relating to legal and associated

-

 

(143)

Total exceptional costs

(106)

 

(1,094)

 

 
Original LSE: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/UVEN/13379606.html