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    and drink experience

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  • OUR FOCUS

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  • VENDING MACHINES

    Whether it’s a freestanding hot drink
    machine, complimented by a snack and
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  • Subsidiaries

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    customers like to have flexibility
    and we look to provide this
    through our wholesale service

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    store, allowing you and your employees
    the opportunity to purchase high quality
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Interim Results for the six months ended 30 September 2016

 

Uvenco UK plc ("the Company" or “the Group”)

 

Interim Results for the six months ended 30 September 2016 

Uvenco UK plc today announces its unaudited interim results for the six months ended 30 September 2016. 

I have pleasure in presenting the unaudited results of Uvenco UK plc for the six months ended 30 September 2016. Our full year results to 31 March 2016 were published only six weeks ago underlining the continuing improvement in the Group’s financial controls and reporting systems. 

For the first time in the last five years our Earnings per share (EPS) are positive. 

Our EBITDA for the last two audited years was negative while for this six months it is £280,402 showing the significant progress made in the turnaround of the Group. 

It should also be noted that the H1 comparative results  to 30 September 2015 did not reflect the substantial write-downs reported recently in the full year accounts to 31 March 2016 and as a result do not reflect the underlying operating profit improvement that is currently being experienced.  However, these six months results do reflect this more rigorous accounting treatment. 

Financial Highlights

 

-     Turnover decreased by 6.7% to £7,453,785 (H1 2016: £7,984,874)

 

-     Operating profit before depreciation and amortisation (EBITDA) decreased 27.3% to £280,402 (H1 2016: £385,901)

 

-     Profit for the period increased to £1,095,030  (H1 2016: loss of £688,670) due to an exceptional one off profit from the write off of loans (see Note 8)

 

-     Net cash outflow from operating activities improved to £46,085 (H1 2016: outflow of £568,302)

 

-     Overall gross borrowings reduced by 66.7% to £1,440,060 (H1 2016: £4,324,865)

 

-     Earnings per share increased from a loss of 8.1p per share to a profit of 1.5p per share

 

 

Re-financing

 

On 12 August 2016, the Group bought itself out of its indebted position with its lending bank.  The Company owed the bank approximately £2.5m which it settled in full for £1m which it borrowed from Reward Corporate Finance Ltd (‘Reward’).  Total Group borrowing now comprises the £1.3m facility from Reward. It is the Group’s intention now to re-finance this borrowing as soon as it is able at a lower rate of interest than it is currently paying, following the end of the three month minimum period of the agreement with Reward.

 

The Group also intends to borrow additional £450,000 to bring its working capital to the normal level.

 

Name Change

 

On 31 May 2016 the Company announced the name change of Snacktime plc to Uvenco UK plc (AIM ticker: UVEN).

 

Operations and Strategy

 

The business has continued undergoing a profound period of change.

 

We have introduced KPIs and a quarterly bonus scheme for the Depot Managers and Regional Sales Managers.

 

New prices have been negotiated with most major suppliers, which with effect from the middle of September, will result in an increase in the overall gross margin for the majority of the snack products. We have started testing the personalised delivery of stock directly to our operators and merchandisers,.

 

We have already increased the door prices for our free standing hot beverage machines and we now review the snacks prices in the Public segment.

 

We have already increased the door prices for our free standing hot beverage machines and we now plan a 7% to 10% increase for the snacks in Public as well as for our cup charges and other invoices to the customers. 

 

A closer look is also being undertaken into our engineering team regarding the  levels of stock of spares in their vans in order to increase their main KPI – fixing the machines during the first visit.

 

Change of financial year end

 

The Group is proposing to change its financial year end from 31 March to 31 December with effect from 31 December 2016. The current financial period will therefore be shortened by three months to 31 December 2016, following which the Company will announce half yearly unaudited results to 30 June 2017 with comparable figures for the 6 months ended 30 June 2016. The reason for the change is to coincide the Group’s financial year end with that of Uvenco Russia.

 

Current Trading & prospects

 

We remain focused on delivering consistent quality products while managing costs, from “clean, full and working” machines, whenever a purchase is desired. We will continue investing into new state of the art machines in order to start growing the revenue. This has already been reflected in the growth of our free on loan estate as well as the coinage receipts compared to the equivalent prior year period.

 

 

Jeremy Hamer

 

 

Chairman

 

Date: 16 November 2016

 

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

 


 

 

 

 

Note

Six months

 

12 months

 

Six months

   

to 30 Sep 16

 

to 31 Mar 16

 

to 30 Sep 15

   

(Unaudited)

 

(Audited)

 

(Unaudited)

   

£

 

£

 

£

Revenue

 

7,453,785

 

15,317,468

 

7,984,874

             

Cost of sales

 

(3,304,273)

 

(7,045,995)

 

(3,223,113)

             

Gross profit

 

4,149,512

 

8,271,473

 

4,761,761

             

Distribution and administration expenses 

(3,869,110)

 

(8,769,770)

 

(4,375,860)

             

Operating Profit before depreciation and amortisation

280,402

 

(498,297)

 

385,901

             

Depreciation

 

(534,899)

 

(913,913)

 

(610,494)

             

Operating Loss before amortisation

 

(254,497)

 

(1,412,210)

 

(224,593)

             

Amortisation

 

(54,000)

 

(158,752)

 

(105,809)

Loss before exceptional items

 

(308,497)

 

(1,570,962)

 

(330,402)

 and finance costs

           

Exceptional items

7

(70,531)

 

(1,787,391)

 

(170,518)

Exceptional profit

8

1,601,291

 

-

 

-

             

Finance costs

 

(127,233)

 

(300,187)

 

(208,912)

Profit/(Loss) before tax

 

1,095,030

 

(3,658,540)

 

(709,832)

             

Income tax credit

 

-

 

135,932

 

21,162

             

Profit/(Loss) for the financial period

 

1,095,030

 

(3,522,608)

 

(688,670)

             

Total comprehensive income for the period

1,095,030

 

(3,522,608)

 

(688,670)

             

Basic profit/(loss) per share

5

1.5p

 

(8.1)p

 

(2.1)p

Diluted profit/(loss) per share

5

1.5p

 

(8.1)p

 

(2.1)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.


 

 

Note

30-Sep

 

30-Sep

 

31-Mar

   

2016

 

2015

 

2016

   

(Unaudited)

 

(Unaudited)

 

(Audited)

   

£

 

£

 

£

ASSETS

     

 

   

Non-current assets

     

 

   

Property, plant and equipment

 

3,192,802

 

4,745,554

 

3,532,250

Intangible assets

 

788,543

 

1,141,124

 

771,581

Deferred tax asset

 

-

 

49,338

 

-

   

3,981,345

 

5,936,016

 

4,303,831

Current assets

           

Inventories

 

979,581

 

905,632

 

888,145

Receivables and prepayments

 

1,707,350

 

2,077,336

 

1,865,737

Cash and cash equivalents

 

293,827

 

719,028

 

291,874

   

2,980,758

 

3,701,996

 

3,045,756

TOTAL ASSETS

 

6,962,103

 

9,638,012

 

7,349,587

             

LIABILITIES

           

Current liabilities

           

Trade and other payables

 

(3,692,935)

 

(4,421,889)

 

(3,796,440)

Short term borrowings

 

(1,338,693)

 

(3,197,516)

 

(1,422,073)

Provisions

6

-

 

(49,110)

 

-

   

(5,031,628)

 

(7,668,515)

 

(5,218,513)

Non-current liabilities

           

Deferred tax liability

 

(238,577)

 

(405,133)

 

(238,577)

Long-term borrowings

 

(80,166)

 

(1,127,349)

 

(1,375,795)

   

(318,743)

 

(1,532,482)

 

(1,614,372)

             

Total liabilities

 

(5,350,371)

 

(9,200,997)

 

(6,832,885)

             

Net assets

 

1,611,732

 

437,015

 

516,702

             

EQUITY

           

Equity share capital

 

1,491,948

 

662,980

 

1,491,948

Share premium account

 

12,721,702

 

10,481,383

 

12,721,702

Share option reserve

 

374,562

 

382,918

 

374,562

Capital redemption reserve

 

1,274,279

 

1,274,279

 

1,274,279

Convertible debt option reserve

 

-

 

147,306

 

-

Warrant reserve

 

2,236,130

 

2,236,130

 

2,236,130

Retained earnings

 

(16,486,889)

 

(14,747,981)

 

(17,581,919)

             

TOTAL EQUITY

 

1,611,732

 

437,015

 

516,702

 


 

Six months

 

Six months

 

to 30 Sep 16

 

to 30 Sep 15

 

(Unaudited)

 

(Unaudited)

Cash flows from operating activities

     

Profit/(Loss) before taxation

852,404

 

(709,832)

Exceptional items

105,999

 

170,518

Profit/(Loss) before taxation and exceptional items

958,403

 

(539,314)

  Depreciation

507,907

 

610,494

  Amortisation

119,064

 

105,809

  Finance costs

127,233

 

208,912

  IFRS 2 share option charge

-

 

8,356

Loss on disposal of fixed assets

-

 

(3,920)

Debt write off

(1,504,341)

 

-

       

Operating cashflow pre-exceptional costs

208,266

 

390,337

Exceptional Items

(105,999)

 

(170,518)

       

Operating cash flow post-exceptional costs

102,267

 

219,819

(Increase)/Decrease in inventories

(99,425)

 

216,669

Decrease/(Increase) in trade and other receivables

158,387

 

(140,413)

Increase in trade and other payables

30,797

 

495,968

(Increase)/Decrease in provisions

-

 

(14,829)

       

Cash generated/(used) from operations

192,026

 

777,214

Interest paid

(127,233)

 

(208,912)

       

Net cash from operating activities

64,793

 

568,302

       

Cash flows from investing activities

     

Purchase of property, plant and equipment

(168,459)

 

(549,995)

Net cash used in investing activities

(168,459)

 

(549,995)

       

Cash flows from financing activities

     

New loans/(Payments) of long-term borrowings

126,403

 

(180,943)

Movement in short-term borrowings

20,130

 

-

Shares issued in period

-

 

100,000

Net Payments of finance lease liabilities

-

 

(65,194)

Net cash received/(used) in financing activities

146,533

 

(146,137)

       

Net increase/(decrease) in cash and cash equivalents

42,867

 

(127,830)

       

Cash and cash equivalents at start of period

291,874

 

320,140

Cash and cash equivalents at end of period

334,741

 

(15,260)

 

 

 

 

 

Share Capital

Share Premium

Convertible Debt Option Reserve

Share Option Reserve

Capital Redemption Reserve

Warrant Reserve

Retained Earnings

Total Equity

 

£

£

£

£

£

£

£

£

Balance at 1 April 15

642,980

10,401,383

147,306

374,562

1,274,279

2,236,130

(14,059,311)

1,017,329

                 

Loss for the period

-

-

-

-

-

-

(688,670)

(688,670)

Shares issued

20,000

80,000

-

-

-

-

-

100,000

Share options expense

-

-

-

8,356

-

-

-

8,356

                 

Balance at 30 September 2015

662,980

10,481,383

147,306

382,918

1,274,279

2,236,130

(14,747,981)

437,015

                 

Loss for the period

-

-

-

-

-

-

(2,833,938)

(2,833,938)

Issue of shares

828,968

2,240,319

-

-

-

-

-

3,069,287

Release of merger reserve

-

-

-

-

-

-

-

-

Share options release

-

-

-

(8,356)

-

-

-

(8,356)

Conversion of debt

-

-

(147,306)

       

(147,306)

                 

Balance at 31 March 2016

1,491,948

12,721,702

-

374,562

1,274,279

2,236,130

(17,581,919)

516,702

                 

Loss for the period

-

-

-

-

-

-

1,095,030

1,095,030

                 

Balance at 30 September 2016

1,491,948

12,721,702

-

374,562

1,274,279

2,236,130

(16,486,889)

1,611,732

 

 

 

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 September 2016 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 March 2016, prepared under IFRS have been filed with the Registrar of Companies.

 

3. Critical accounting estimates and judgements

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future.  The principal areas where judgement was exercised is as follows:

 

-       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 September 2016 of 74,597,452 (H1 2015 - 32,843,003).

 

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 2016

Specialist drinks

Franchising

Vending

 

Total

 

2016

2016

2016

 

2016

 

£

£

£

 

£

           

Revenue

         

Total revenue

1,276,184

656,193

5,521,408

 

7,453,785

Inter-segmental revenue

-

-

-

 

-

Group’s revenue per consolidated

1,276,184

656,193

5,521,408

 

7,453,785

statement of comprehensive income

         

Depreciation

(96,375)

(49,500)

(389,024)

 

(534,899)

Amortisation 

-

52,387

(106,387)

 

(54,000)

Operating profit/(loss) before exceptional items

4,696

300,295

(206,810)

 

98,181

           

Exceptional costs included within administration expenses and finance expense

 

(70,531)

Head office costs

       

(406,678)

Share-based payments

       

-

Finance expense

       

(127,233)

Debt write off

       

1,601,291

Group profit before tax

       

1,095,030

 

SEGMENTAL Profit & Loss 2015

Specialist drinks

Franchising

Vending

 

Total

 

2015

2015

2015

 

2015

 

£

£

£

 

£

           

Revenue

         

Total revenue

1,173,183

772,899

6,333,129

 

8,279,211

Inter-segmental revenue

-

-

(294,337)

 

(294,337)

           

Group’s revenue per consolidated

1,173,183

772,899

6,038,792

 

7,984,874

statement of comprehensive income

         

Depreciation

(94,638)

(22,869)

(492,987)

 

(610,494)

Amortisation 

(19,921)

(29,525)

(56,363)

 

(105,809)

Impairment

 

 

 

 

-

           

Segmental operating loss/(profit) before  

(9,038)

227,931

(105,680)

 

113,213

exceptional items

 

 

 

 

 

           

Exceptional costs included within administration expenses and finance expense (Note 5)

 

(170,518)

Head office costs

       

(435,259)

Share-based payments

       

(8,356)

Finance expense

       

(208,912)

           

Group loss before tax

       

(709,832)

 

SEGMENTAL Balance Sheet 2016

Specialist drinks

Franchising

Vending

Head office

Total

 

2016

2016

2016

2016

2016

 

£

£

£

£

£

           

Additions to non-current assets

48,197

-

117,532

9,400

175,129

           

Reportable segment assets

908,082

161,577

5,527,216

365,227

6,962,102

           

Tax assets

-

-

-

-

-

Total Group assets

908,082

161,577

5,527,216

365,227

6,962,102

           

Reportable segment liabilities

(319,903)

(285,956)

(2,456,124)

(630,952)

(3,692,935)

           

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

 

(1,418,859)

Deferred tax liabilities

       

(238,577)

Total Group liabilities

       

(5,350,371)

 

SEGMENTAL Balance Sheet 2015

Specialist drinks

Franchising

Vending

Head office

Total

 

2015

2015

2015

2015

2015

 

£

£

£

£

£

           

Additions to non-current assets

7,202

-

540,593

2,200

549,995

           

Reportable segment assets

971,536

305,631

6,977,234

1,334,273

9,588,674

           

Tax assets

-

-

49,338

-

49,338

Total Group assets

971,536

305,631

7,026,572

1,334,273

9,858,710

           

Reportable segment liabilities

(505,448)

(394,748)

(4,486,981)

(1,538,690)

(6,925,867)

           

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

 

(1,869,997)

Deferred tax liabilities

       

(405,133)

Total Group liabilities

       

(9,200,997)

 

7. EXCEPTIONAL COSTS

 

6 months ended 30 September 2016

             
               
 

Total

 

Provision of items from prior periods

 

Cash paid to 30 Sept 2016

 

Future cash impact

 

£

 

£

 

£

 

£

               

Redundancy and reorganisation

62,766

 

-

 

62,766

 

-

Costs relating to legal and associated

7,765

 

-

 

7,765

 

-

Total exceptional costs

70,531

 

-

 

70,531

 

-

 

6 months ended 30 September 2015

             
               
 

Total

 

Provision of items from prior periods

 

Cash paid to 30 Sept 2016

 

Future cash impact

 

£

 

£

 

£

 

£

               

Redundancy and reorganisation

146,722

 

-

 

146,722

 

-

Costs relating to legal and associated

23,796

 

-

 

23,796

 

-

Total exceptional costs

170,518

 

-

 

170,518

 

-

 

8. EXCEPTIONAL PROFIT

 

On 12 August 2016 Uvenco UK Plc entered into an agreement to settle the group's £2.5 million outstanding bank facility, plus £100,000 of accrued bank fees, for £1.0 million, payable in cash. This resulted in an exceptional profit of £1.6 million.

 

On the same date the Company, through its subsidiaries Uvenco Limited, Simply Drinks Limited and Drinkmaster Limited, has entered into a £1.3 million debt facility agreement with Reward Invoice Finance Limited, part of the Reward Finance Group (''Reward''), a Manchester and Leeds based alternative lender, in order to provide the funds to satisfy the bank facility settlement, as well as additional working capital.

 

9. change of year end

 

The Board of Uvenco UK Plc has resolved that the Company’s financial year end be changed to 31 December.  This means that the next set of Financial Statements will be drawn up for the nine months to 31 December 2016.

 

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