TIDMUVEN
RNS Number : 6658J
Uvenco UK plc
30 June 2017
30 June 2017
Uvenco UK plc
Final Results
Uvenco UK plc ("Uvenco", the "Company" or the "Group") today
announces its final audited results for the 9-month period ended 31
December 2016.
The Financial Statements are being made available to
shareholders today and will also be available shortly from the
Company's website, www.uvenco.co.uk, together with the notice of
Annual General Meeting to be held on 24 July 2017.
Financial Highlights
-- Revenues (annualised) decreased by 8.9% (12 month period
ended 31 March 2016 - decreased by 5.3%)
-- Gross profit has increased from 52.0% to 56.4% due to improve
stock control and price increases to customers
-- Adjusted EBITDA* of GBP324,000 for the nine month period
ended 31 December 2016 (12 month period ended 31 March 2016 - loss
of GBP473,000)*
-- Profit before taxation for the nine month period ended 31
December 2016 of GBP421,000 (12 month period ended 31 March 2016 -
Loss of GBP3,659,000)
-- Net assets of GBP982,000 (31 March 2016 - GBP517,000)
-- Operating cash inflow for the period was GBP219,000 (12 month
period ended 31 March 2016 - GBP787,000 outflow).
-- Administration expenses, before exceptional items,
amortisation but including depreciation, decreased by 7.6%
(annualised) to GBP6,713,000 (12 month period ended 31 March 2016 -
GBP9,684,000)**. Total administration expenses decreased by 21.2%
(annualised) to GBP6,869,000 (12 month period ended 31 March 2016 -
GBP11,630,000).
-- Net debt has decreased from GBP2.5m at the end of 31 March
2016 to GBP1.5m at 31 December 2016.
*- Adjusted EBITDA is defined as profit before finance income
and charges, depreciation, exceptional items, amortisation and loss
on disposal of fixed assets and tax
**- As set out on the Statement of Comprehensive Income
Sergei Kornienko, Chief Executive Officer, commented: "By moving
the business into profit we have demonstrated the success of our
turnaround plan. We intend to build on this result and we are very
excited about the future of the business. This success has been
achieved due to the hard work and dedication of our staff and I
would like to give my personal thanks."
Enquiries
Uvenco UK plc Tel No. 020 8879 8300
Sergei Kornienko
Peter Goodman
Stockdale Securities Tel No. 020 7601 6100
Tom Griffiths
Richard Johnson
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU 596/2014).
CHAIRMAN'S STATEMENT
I am pleased to present the audited financial statements for the
nine month period ended 31 December 2016. It has been a period of
considerable progress in reshaping the business. We are reporting a
profit at both the adjusted EBITDA and pre-tax levels, as well as
further reductions in borrowing levels. Unless otherwise detailed,
current period figures are for the 9-month period to 31 December
2016, with comparative figures for the 12-month period to 31 March
2016.
Financials
Turnover was GBP10,857,000 (2016: GBP15,892,000) producing an
adjusted EBITDA of GBP324,000 (2016: Loss GBP473,000). (Adjusted
operating profit represents operating profit before depreciation,
amortisation, loss on disposal of fixed assets and exceptional
items). There was a small reduction in turnover on an annualised
basis of 8.9% (2016: 5.3%). This was mainly due to management's
focus on contract margin, which has resulted in fewer low margin
contracts being entered into or renewed.
The profit before taxation for the period was GBP421,000 (2016 -
Loss GBP3,659,000). This improvement was driven by improved gross
margins and reduced overheads as well as the gain made on
refinancing.
Gross margins improved by 4.4% to 56.4% (12 month period ended
31 March 2016 - 52.0%) due to improved stock control, customer
price increases and the move away from certain lower margin
business mentioned above.
Total administration costs for the period were GBP6,869,000 (12
month period ended 31 March 2016 -
GBP11,630,000). This significant reduction is driven by the cost reduction focus discussed above.
Normalised operating margin increased to positive 3.0% from
negative 3.0%. This was due to the improvements described above,
such as improved purchasing and stock control and better control of
overheads.
Finance costs increased to GBP407,000 for the nine month period
ended 31 December 2016 (12 month period ended 31 March 2016 -
GBP300,000) and net borrowings at 31 December 2016 had decreased to
GBP1,522,000 (2016: GBP2,506,000) due an agreement made to pay off
a long term loan, overdraft and unpaid finance costs of GBP2.6
million for a consideration of GBP1.0 million. A one off
exceptional credit of GBP1,571,000 was created as a result of this
agreement.
Net assets increased to GBP982,000 at 31 December 2016 compared
to GBP517,000 at 31 March 2016.
The increase in EBITDA has driven a strong improvement in cash
flow. Operating cash inflow for the period was GBP219,000 (12 month
period ended 31 March 2016 - GBP787,000 outflow).
No dividend is proposed (12 month period ended 31 March 2016 -
nil).
New Share Issue
On 24 November 2016 the company announced that certain Directors
and management subscribed for 1,666,667 new shares at 6 pence per
share to support the continuing restructuring of the Group. A
further 200,000 shares were issued at the same time.
Banking and Borrowings
On 12 August 2016 the Group bought itself out of a long term
loan. The company owed GBP2.6 million in total which it settled in
full for GBP1.0 million borrowed from Reward Corporate Finance Ltd
('Reward'). At that point our core borrowing was based around a
maximum limit of GBP1,365,000 from Reward together with GBP80,000
of shareholder loans. It is the Group's intention to re-finance as
soon as we are able to achieve a lower rate of interest.
On 11 January 2017, post year end, the company announced that it
had entered into a loan of GBP410,000 with Cleitus Investment
Limited (CIL) a wholly owned subsidiary of Uvenco Group in Russia.
This loan has an interest rate of 8% and is due for repayment in 12
equal instalments starting in January 2018. Prior to the period
end, in November and December 2016 the Company received payments
totalling GBP400,000 from CIL in relation to this loan, which are
reflected in the Company's borrowings and net debt figures as at 31
December 2016. CIL is a company owned and controlled by Boris
Belotserkovsky and therefore the GBP400,000 received during the
period constituted a related party transaction (see Note 24).
On 27 June 2017, the company announced a further loan facility
of GBP1.0 million with CIL again at an interest rate of 8%. The
facility has been fully drawn down and the additional funding will
be used to support the Group's continued turnaround. This GBP1.0
million loan is repayable in equal quarterly instalments beginning
September 2019.
On 13 February 2017 the Group announced the sale of its Freehold
in Corby for a gross sum of GBP328,000 showing a book profit of
GBP201,000. Of these proceeds GBP240,000 was used to reduce the
Reward facility to a maximum level today of GBP1,125,000.
On 1 April 2017, post year end, our day to day banking moved to
Barclays plc bringing to a close our 6 year relationship with The
Cooperative Bank.
Name Change
On 31 May 2016 we announced the name change of Snacktime plc to
Uvenco UK plc (AIM ticker: UVEN).
Year End Change
The shortening of our reporting period to nine months will bring
about the change in our year end to 31 December going forward. Thus
our next full year reporting date will be 31 December 2017.
Operations and Strategy
We aim to provide our customers across all sectors with a market
leading, innovative out of home food and drink experience. All
aspects of our activities are now concentrating on this vision
including our rebranded Uvenco website at www.uvenco.co.uk. Whether
it is a freestanding hot drink machine or a snack and cold drink
machine, we can provide a bespoke solution to satisfy any business
requirements.
We have started moving forward with our two latest innovative
products. The 24U application has been launched and is now
available at certain of our locations. The 'Move' machine will be a
good addition to our portfolio in the Public Sector. The first
installations of these machines will take place in the second half
of the year. Our investment in new machines has never been on hold.
We are in the middle of the installation process for QE NHS in
Birmingham.
The testing of our CRM software has started and our intention is
to launch the full version at the beginning of January 2018 so that
both Sales team and Customer Care managers work from within one
system. The headcount of our Sales Team has significantly increased
in 2016 while a newly appointed Customer Care team looks after our
clients across the country.
The new branded Uvenco cup will be introduced soon to increase
the awareness of the Uvenco brand and with it the loyalty of our
customers.
The sale of the Corby depot announced in February 2017 has
resulted in a combining of the operational activities of the
Midlands and the North, managed from our Blackburn depot.
However alongside this depot amalgamation we are studying the
possibility of setting up two new depots to operate in Scotland and
Northern Ireland in support of our aim to be a genuine second
national operator.
Finally, on 28 June 2017 our route operator Joanne Cunliffe was
awarded the Vendies 2017 "Route Operator of the Year" award. The
award recognises an outstanding level of Uvenco service,
represented by customer testimonies and judged by an independent
panel of jury experts. This continues our success since the
previous Vendies Awards in 2015, when our employees won the "Route
Operator of the Year" and "Service Engineer of the Year"
awards.
People
In June 2016 Peter Goodman was appointed Company Secretary and
CFO designate and has continued reshaping the new Finance team
based in Blackburn
I would like to take this opportunity to thank all of our staff,
new and continuing, who have supported us through yet another
period of intense change.
Current Trading & prospects
The positive EBITDA has continued into the start of 2017. In the
early months of 2017 our sector has seen two important mergers and
acquisitions announced and with such changes come opportunities. We
have just won a major NHS contract in the Midlands and will see the
launch of 24U our proprietary smart phone app imminently. This
focus on customer service and innovation gives us a clear focus and
increasing enthusiasm for the future.
Jeremy Hamer
Chairman
Date: 29 June 2017
BOARD OF DIRECTORS
Executive Directors
Sergei Kornienko, Chief Executive Officer. Sergey Kornienko, has
been the Chief Executive of Uvenco Group, a Russian manufacturer
and operator of vending machines and other retail payment
equipment, since 2009, having been its Chief Financial Officer
since 2007. Prior to this he had been Head of Tax and subsequently
CFO of Unicum Group since 2005. Previously, Sergei had been Chief
Accountant of the Russian branch of IHS Energy (1999-2005) and of
AO Mair (1995-1999) having graduated from the Academy of Finance,
Moscow in 1998 with a PhD in Finance.
Non-Executive Directors
Jeremy Hamer, Chairman, FCA has a unique professional
background, which blends an early successful career in financial
services and then the food industry, with a more recent array of
mergers, acquisitions, fundraising and turnaround experience, with
a prime focus on the AIM market. He currently acts as a
non-executive director across a portfolio of publicly quoted
companies, as well as being an active Board level executive
coach.
Boris Belotserkovsky, is both a Russian and US citizen. He is
Chairman and sole owner of Uvenco (www.uvenco.ru), Russia's leading
vending company. He also has material shareholdings in Oplata LLC
and Transvend CJSC which are both involved in vending. Mr
Belotserkovsky is a President of the Russian National Vending
Association and a Managing Director and a member of the executive
committee of the European Vending Association.
Michael Jackson, MA FCA founded Elderstreet Investments Limited
in 1990 and is its executive chairman. For the past 24 years, he
has specialised in raising finance and investing in the smaller
companies quoted and unquoted sector. From 1983 until 1987 he was a
director and from 1987 until 2006 was chairman of FTSE 100 company
The Sage Group plc. He was also Chairman of PartyGaming plc,
another FTSE 100 company. He is Chairman of Netcall Plc and
Advanced Computer Software Plc. He is also a director of
Elderstreet portfolio companies, Fords Packaging Systems Limited,
Baldwin & Francis Holdings Limited, AngloInfo Limited, and
Access Intelligence plc. Michael studied law at Cambridge
University, and qualified as a chartered accountant with Coopers
& Lybrand before spending five years in marketing for various
US multinational technology companies.
STRATEGIC REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Group are 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.
BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The Chairman's statement sets out the review of the business in
the year and future developments.
RISKS AND UNCERTAINTIES
The operation of a public listed company involves a series of
inherent risks and uncertainties across a range of strategic,
commercial, operational and financial areas. The Board has outlined
their perception of particular risks and uncertainties facing the
Group below. These risks and uncertainties could cause the actual
results to vary from those experienced previously or described in
forward looking statements within the annual report:
-- Changing consumer trends
The emphasis of the Group's sales has shifted towards hot
drinks. This has reduced our exposure to the snack market which
could be subject to future regulation relating to healthier eating.
It is in the interests of the brands whose products we stock to
develop either healthier snacks or to amend the recipe of their
existing items to, for example, reduce fat and salt content as
consumer tastes and trends change towards healthier products. The
Group's offering will evolve to meet that demand.
-- Liquidity Risk
Whilst the Group's borrowing has reduced considerably during the
period, day to day cash management still remains our priority while
the operating cash generation of the Group is rebuilt. Details of
equity raised and the renegotiation of the group's debt is included
in the Chairman's statement.
-- Litigation and dispute risk
From time to time, the Group may be involved in litigation. This
litigation may include, but is not limited to, contractual claims,
personal injury claims, employee claims and environmental claims.
If a successful claim is pursued against the Group, the litigation
may adversely impact the sales, profits or financial performance of
the Group. Any claim, whether successful or not, may adversely
impact on the Company's share price. The Group manages contracts
through proactive relationship management and sensible dispute
resolution and compromise. Furthermore the Group always aims to
have a spread of contracts such the impact of a significant dispute
on any individual contract would have a manageable overall impact
on the business.
-- General economic conditions
Changes in the general economic climate in which the Group
operates may adversely affect the financial performance of the
Group. Factors which may contribute to that general economic
climate include the level of direct and indirect competition
against the Group, industrial disruption, the rate of growth of the
Group's sectors, interest rates and the rate of inflation. The
directors do not believe that Britain's decision to leave the EU
has had a noticeable impact on the trading of the Group.
-- Key customer loss
The loss of a large contract or a significant customer may have
a significant impact on revenue and margin. The Group manages this
risk by avoiding key customer reliance. No customer provides more
than 10% of overall Group revenue. Furthermore a constant pipeline
of new contracts ensures that losses are replaced and the impact of
the loss is minimised.
-- Covenants compliance
Since 12 August 2016 the covenants in place under the Reward
agreement include the settlement of interest charges monthly as
they fall due and the need to ensure there is not a material
deterioration of trade. If the Group defaults on this these
commitments Reward are empowered to foreclose on their loan with
immediate effect. The Group monitors its interest cover on a
monthly basis to ensure it is adequate. If the interest cover fell
below an acceptable level the Group would have pro-active
discussions Reward. The Group has a letter of support from Partner
Invest LLC for up to GBP500,000 should a default occur.
-- Product price changes
The purchase price of products distributed by the Group can
fluctuate from time to time, thereby potentially affecting the
results of operations. Adverse economic conditions and rising input
prices may impact the Group's revenue and, as a result, its
profitability. During the year there were significant price rises
in confectionary due to the impact of Brexit. These have been
passed on to customers through price increases of approximately
7%.
The Group mitigates risks over stock by managing stock levels
efficiently and ensuring they are kept to a minimum.
KEY PERFORMANCE INDICATORS
Key performance indicators are used to measure and control both
financial and operational performance. Revenue growth and
normalised operating margin are tracked to ensure plans are on
track and corrective actions taken where necessary.
9 months 12 months
ended 31 ended
December 31 March
2016 2016 (Restated)
Revenue growth(1) (8.9%) (5.3%)
Normalised operating margin(2) 3.0% (3.0%)
1 Revenue growth = Revenue increase as a percentage of the
previous year per the consolidated statement of comprehensive
income, adjusted for length of period.
2 Normalised operating margin is calculated by dividing adjusted
operating profit/(Loss) by Revenue. Adjusted operating profit
represents operating profit before depreciation, amortisation, loss
on disposal of fixed assets and exceptional items.
FINANCIAL INSTRUMENTS
At the period end the Group's financial instruments comprise
redeemable and convertible loan notes, and an invoice discounting
facility, hire purchase and finance leases, cash and liquid
resources, and various items arising directly from its operations,
such as trade receivables and trade payables. The main purpose of
these financial instruments is to finance the Group's
operations
The main risks arising from the Group's financial instruments
are interest rate risk, credit risk and liquidity risk.
Full details of the Group's financial assets and liabilities are
set out in Notes 16 - 18 and Note 22 to the financial
statements.
Liquidity risk
Short term flexibility is available through existing bank
facilities and the netting off of surplus funds.
Interest rate risk
The Group's hire purchase contracts and convertible loan are at
a fixed rate of interest and so cash flow is not affected by
interest rate or cash flow risk. The Group is not exposed to
interest rate fluctuations as its invoice discounting facility is
at a fixed interest rate.
Credit risk
The Group's principal financial assets are cash and trade
receivables. The credit risk in relation to trade receivables is
minimised by ensuring that customer relationships are nurtured and
monies are collected as they fall due.
On-going management services fees due from the franchisees are
in many cases secured over franchisees' properties in the event of
non-payment. At the end of the period a provision of GBP309,000 was
made against trade receivables which relate to historic debts that
were not deemed recoverable.
EXCEPTIONAL ITEMS
Included within the financial statements are exceptional costs
of GBP105,000 (year ended 31 March 2016 - GBP1,787,000).
Full details of exceptional items are included in Note 5 of the
financial statements.
Exceptional items in the year ended 31 March 2016 and the period
ended 31 December 2016 denoted as redundancy costs are a part of
the continued restructuring of the Group.
Within the finance income in the nine month period ended 31
December 2016 there is an exceptional one off credit of
GBP1,571,000. This was due to the settlement of a GBP2.6 million
term loan, overdraft and finance costs unpaid for a consideration
of GBP1.0 million.
GOING CONCERN
The Directors have drawn up these financial statements on a
going concern basis. The reasons supporting this position are
outlined in the accounting policy Note 1.
ACCOUNTING PERIOD
The financial period represents the nine months to 31 December
2016 (prior financial period is 12 months to 31 March 2016).
This report was approved by the Board on 29 June 2017 and is
signed on its behalf by
Sergei Kornienko
Chief Executive Officer
DIRECTORS' REPORT
The Directors present their report and the audited financial
statements for the period ended 31 December 2016.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the strategic
report, the director's report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and the company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law). Under company law the directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and company
and of the profit or loss of the Group for that period. The
directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment
Market.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the on-going
integrity of the financial statements contained therein.
PROVISION OF INFORMATION TO AUDITORS
Each of the persons who are Directors at the time when this
Directors' report is approved has confirmed that:
-- so far as that Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- each Director has taken all the steps that ought to have been
taken as a Director in order to be aware of any information needed
by the Company's auditor in connection with preparing their report
and to establish that the Company's auditor is aware of that
information.
DIVIDS
The Directors do not recommend payment of a dividend in respect
of the period ended 31 December 2016 (12 months ended 31 March
2016: GBPNil).
The Directors who served during the period and their direct
beneficial interest in the issued share capital were:
Ordinary Ordinary
Ordinary shares of GBP0.02 each Shares Shares
31 December 31 March
2016 2016
B. Belotserkovsky 2,533,067 1,616,400
M. Jackson 2,031,971 1,781,971
J. Hamer 1,969,967 1,719,967
S. Kornienko 600,000 600,000
Of the above holdings the following were held via their
individual SIPP's - J. Hamer 1,969,967 and M. Jackson
1,523,971.
At 31 December 2016, the Belotserkovsky concert party held
41,126,683 ordinary shares in the company representing 53.7%.
M. Jackson indirectly held a beneficial interest in 4,963,150
and 1,796,296 ordinary shares in the company via his Directorship
and shareholding in Elderstreet Investments Ltd, and Elderstreet
VCT plc respectively M.Jackson also had a beneficial interest in
1,141,588 ordinary shares held by the Trustees of the WE Jackson
Trust of which his 'minor' daughter is a beneficiary. In total
these holdings represent 10.1%.
J. Hamer had a de minimis interest via his shareholding in both
Elderstreet VCT plc (approximately 0.35%) and Unicorn AIM VCT plc
(approximately 0.1%).
As at the end of the period the Directors had no interest in
share options.
The Directors' remuneration is shown in Note 7 to the financial
statements.
capital
The capital structure of the Group consists of debt, which
includes the borrowings, finance leases and redeemable and
convertible loan notes disclosed in Note 17, cash and cash
equivalents, and equity attributable to equity holders of the
parent, comprising issued capital, warrant reserve, merger reserve,
capital redemption reserve and retained earnings as disclosed in
Note 20.
The Group sets the amount of capital it requires in proportion
to risk. The Group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.
SUBSTANTIAL INTERESTS
There were the following substantial interests (3% or more) in
the Company's issued ordinary share capital as at 2 May 2017.
Versatel Company Limited* 31.1%
Mrs V. Belotserkovskaya 15.5%
Vidacos Nominees Limited 14.2%
Unicorn Asset Management
Limited 12.4%
Elderstreet Investments
Limited 6.8%
Uvenco Holdings Limited 3.0%
*The Belotserkovsky Concert Party of which Versatel Company
Limited is a part, holds an interest in 53.7% of the Company's
issued ordinary share capital. Versatel Company Limited is deemed
to be a part of the Concert Party as a result of the business
relationship between its owner and Boris Belotserkovsky.
DIRECTORS' INDEMNITIES
The Company has paid GBP3,250 for the nine month period ended 31
December 2016 (12 month period ended 31 March 2016 - GBP5,250) in
respect of Directors' and Officers' indemnity insurance.
REPORT ON CORPORATE GOVERNANCE
The Group is committed to high standards of corporate
governance. The Board is accountable to the Company's shareholders
for good corporate governance. Although the Group is not required
to comply with the UK Corporate Governance Code, this statement
describes how the principles of corporate governance are applied to
the Group.
Directors
The Board of Uvenco UK plc comprises one Executive Director and
three Non-executive Directors. The Board is chaired by J.J.Hamer,
who has the primary responsibility for running the Board, and he is
assisted by the Senior Independent Non-executive Director
M.E.W.Jackson,.
S.Kornienko has executive responsibilities for the remaining
operations, results and strategic development of the Group. Peter
Goodman is acting as Head of Finance and Company Secretary. The
Board structure ensures that no individual or group dominates the
decision making process and this is further controlled through a
Relationship Agreement signed in November 2014, a copy of which is
available in the Takeover Code section Rule 9 waiver.
B.Belotserkovsky is not deemed an independent Director due to
his Concert Party controlling 53.7% of the shares currently in
issue. S.Kornienko is deemed to be a member of the Belotserkovsky
Concert Party. J.J.Hamer and M.E.W.Jackson are considered to be
independent of both the management and the Concert Party and from
any business relationship, which could materially interfere with
their independent judgment.
The Board meets regularly with no less than ten such meetings
held in each calendar year. There is a formal schedule of matters
specifically reserved for the Board however its decisions enable it
to manage overall control of the Group's affairs. All Directors
have access to the services of the Company Secretary and may take
independent professional advice at the Group's expense in the
furtherance of their duties. Management has an obligation to
provide the Board with appropriate and timely information to enable
it to discharge its duties. The Chairman ensures that all Directors
are properly briefed on issues arising at Board meetings.
At the present time the Group does not have a separate
Nominations Committee preferring to deal with any Board
appointments at our regular Board meetings. This would include the
decision to recommend the appointment, or re-appointment, of a
Director.
The Company's Articles of Association ensure Directors retire at
the third Annual General Meeting after the Annual General Meeting
at which they were elected and may, if eligible, offer themselves
for re-election.
M.E.W.Jackson chairs the Audit Committee and J.J.Hamer chairs
the Remuneration Committee. The Non-executive Directors and the
Chairman are members of all the above committees.
Directors' remuneration
The remuneration packages for Executive Directors are structured
to attract, motivate and retain Directors with the experience,
capabilities and ambition required to achieve the Group's strategic
aims. The Remuneration Committee is responsible for determining and
reviewing the annual remuneration packages of Executive
Directors.
The salaries of the Executive Directors are set by the committee
and reviewed annually, taking into account the performance of the
Group, and the individual, and salary increases given to other
Group employees.
Relations with shareholders
The Board attaches a high importance to maintaining good
relationships with shareholders, whether institutional or private
ones. The Board encourages all Directors to attend shareholder
meetings enabling the Board to develop an understanding of the
views of shareholders.
The Company counts all proxy votes and except where a poll is
called, it indicates the level of proxies lodged on each resolution
and the balance for and against the resolution, after it has been
dealt with on a show of hands.
A separate resolution on each substantially separate issue is
proposed at the Annual General Meeting. The Chairman of the Board
and each of the Chairmen of the Audit and Remuneration Committees,
are available to answer questions at the Annual General
Meeting.
Accountability and Audit
The respective responsibilities of Directors and Auditors are
set out in the Annual Report. The Board has established an Audit
Committee. The Audit Committee's primary responsibilities include
monitoring of internal control, approving accounting policies,
agreeing the treatment of major accounting issues, appointment and
remuneration of the external auditors and reviewing the interim and
financial statements before submission to the Board. It meets at
least once a year with the external auditors to review their
findings. At these meetings the Non-executive Directors have the
opportunity to discuss findings with the auditors in the absence of
the Executive Directors.
To follow best practice and in accordance with Ethical Standard
1 issued by the Financial Reporting Council, the external auditors
have discussions with the audit committee on the subject of auditor
independence and have confirmed their independence in writing.
Internal control
The Directors acknowledge that they are responsible for ensuring
that the Group has in place a system of internal controls, which is
both effective and appropriate to the nature and size of the
business.
The Board, through the Audit Committee, has reviewed the
operation and effectiveness of the systems of internal control
throughout the accounting year and the period to the date of
approval of the financial statements, although it should be
understood that such systems are designed to provide reasonable but
not absolute assurance against material misstatement or loss. The
Group's system of controls include:
-- A comprehensive budgeting system with annual budgets approved by the Directors;
-- Monthly monitoring of actual results against budget and a review of variances;
-- Close involvement of Directors who approve all significant transactions;
-- Internal management rules which include financial and
operating control procedures for all management of the Group;
-- Identification and appraisal by the Board of the major risks
affecting the business and the financial controls;
-- Bank facilities and other treasury functions are monitored
and policy changes approved by the Board.
The Board has considered the need for an internal audit function
and concluded that this would not be appropriate at present due to
the size of the Group.
FINANCIAL INSTRUMENTS
Details of the Group's financial instruments are included within
the Strategic Report on Page 11 and Note 22 of the Financial
Statements.
EMPLOYEE INVOLVEMENT
The Group aims to improve the performance of the organisation
through the development of its employees. Their involvement is
encouraged by means of team working and improving communications
throughout the Group.
The Group could be adversely impacted if it failed to manage
health and safety effectively. The Board of the Group believes the
safety of its employees, contractors and suppliers is fundamentally
important. A Group compliance programme is in place which ensures
that all legal obligations are adhered to. Health and safety is
discussed at the monthly Board meetings.
DISABLED EMPLOYEES
The Group is committed to equality of employment and its
policies reflect a disregard of factors such as disability in the
selection and development of employees. The Group is involved in
various initiatives which promote a positive understanding of
disability and the integration of the disabled into the
workforce.
POST BALANCE SHEET EVENTS AND FUTURE DEVELOMENTS
On 7 January 2017 the Group exchanged contracts on the sale of
its property in Corby, with completion on 27 January. This is as a
result of a development in our stock management, as stock is now
being delivered directly to operators rather than held in a
warehouse, which will result in significant savings.
The property sale was in excess of the book value and resulted
in a profit on disposal of GBP201,000 which will be reported in the
2017 financial statements.
AUDITORS
BDO LLP have expressed their willingness to continue in office
as auditor and a resolution proposing their reappointment will be
submitted at the forthcoming Annual General Meeting.
This report was approved by the Board on 29 June 2017 and is
signed on its behalf by
Jeremy Hamer
Chairman
REPORT OF THE INDEPENT AUDITOR
PERIOD ended 31 December 2016
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF UVENCO UK PLC
We have audited the financial statements of Uvenco UK plc for
the 9 month period ended 31 December 2016 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated
and Company Statements of Changes in Equity, the Consolidated
Statement of Financial Position and Company Balance Sheet, the
Consolidated Statement of Cash Flows, and the related notes. The
financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been
applied in preparation of the parent company financial statements
is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Financial Reporting
Council's (FRC's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the FRC's website at
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and the parent company's affairs as at 31
December 2016 and of the group's profit for the period then
ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company's financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and directors'
report for the financial period for which the financial statements
are prepared is consistent with the financial statements; and
-- the strategic report and directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Christopher Pooles (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Reading
29 June 2017
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC30512
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
PERIOD ended 31 December 2016
Notes 9 month period 12 month
ended 31 period ended
December 31 March
2016 2016 (Restated)
GBP000 GBP000
-------------------------------------- ------ --------------- -----------------
REVENUE 3 10,857 15,892
Cost of sales (4,731) (7,621)
--------------- -----------------
GROSS PROFIT 6,126 8,271
Administration expenses (6,869) (11,630)
--------------- -----------------
Adjusted EBITDA 324 (473)
--------------- -----------------
Depreciation 12 (566) (914)
Amortisation 13 (51) (159)
Loss on disposal of property,
plant and equipment 5 (345) (26)
Exceptional items 5 (105) (1,787)
OPERATING LOSS 5 (743) (3,359)
--------------- -----------------
Finance Income - Exceptional profit
on refinancing 6 1,571 -
Finance costs 6 (407) (300)
PROFIT/(LOSS) BEFORE TAXATION 421 (3,659)
--------------- -----------------
Income tax (charge)/credit 10 (67) 136
PROFIT/(LOSS) AFTER TAXATION AND
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE
TO THE OWNERS OF THE PARENT 354 (3,523)
=============== =================
Profit/(loss) per share attributable
to the owners of the parent
Basic profit/(loss) per share 11 0.5p (8.1)p
Diluted profit/(loss) per share 11 0.5p (8.1)p
All operations are continuing. The Notes on pages 25 to 61 form
part of these financial statements.
Consolidated STATEMENT OF Changes in equity
PERIOD ended 31 December 2016
Issued Share Capital Share Convertible
share premium redemption option debt option Warrant Retained
GROUP capital account reserve reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 27 March
2015 643 10,401 1,274 375 147 2,236 (14,059) 1,017
--------- --------- ------------ --------- ------------- --------- --------- --------
Issue of shares in the
year
(net of proceeds) 440 684 - - - - - 1,124
Loan notes converted 409 1,636 - - - - - 2,045
Retained loss for the
year - - - - (147) - (3,523) (3,670)
Balance at 31 March
2016 1,492 12,721 1,274 375 - 2,236 (17,582) 516
--------- --------- ------------ --------- ------------- --------- --------- --------
Issue of shares in the
period 37 75 - - - - - 112
Retained profit for the
period - - - - - - 354 354
Balance at 31 December
2016 1,529 12,796 1,274 375 - 2,236 (17,228) 982
========= ========= ============ ========= ============= ========= ========= ========
The Notes on pages 25 to 61 form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
PERIOD ended 31 December 2016
31 December 31 March
Notes 2016 2016
GBP000 GBP000
------------------------------------- ------- ------------ ---------
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 12 2,914 3,532
Intangible assets 13 719 771
3,633 4,303
------------ ---------
CURRENT ASSETS
Inventories 15 897 888
Trade and other receivables 16 1,802 1,866
Cash and cash equivalents 289 292
2,988 3,046
------------ ---------
TOTAL ASSETS 6,621 7,349
============ =========
LIABILITIES
CURRENT LIABILITIES
Borrowings 17 (1,312) (1,422)
Trade and other payables 18 (3,604) (3,796)
(4,916) (5,218)
------------ ---------
NON CURRENT LIABILITIES
Borrowings 17 (499) (1,376)
Deferred tax liability 14 (224) (238)
------------ ---------
(723) (1,614)
TOTAL LIABILITIES (5,639) (6,832)
------------ ---------
NET CURRENT LIABILITIES (1,928) (2,172)
------------ ---------
NET ASSETS 982 517
============ =========
EQUITY - ISSUED SHARE CAPITAL ATTRIBUTABLE
TO THE OWNERS OF THE PARENT
COMPANY
Share capital 19 1,529 1,492
Share premium account 20 12,796 12,722
Capital redemption reserve 20 1,274 1,274
Share option reserve 20 375 375
Warrant reserve 20 2,236 2,236
Retained deficit 20 (17,228) (17,582)
TOTAL EQUITY 982 517
============ =========
These financial statements were approved by the Board of
Directors and authorised for issue
on 29 June 2017.They were signed on its behalf by:
Sergei Kornienko
The Notes on pages 25 to 61 form part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD ended 31 December 2016
9 month 12 month
period ended period ended
31 December 31 March
2016 2016
GBP000 GBP000
---------------------------------------- -------------- --------------
CASH FLOW FROM OPERATING ACTIVITIES
-------------- --------------
Profit/(Loss) Before Tax 421 (3,659)
-------------- --------------
Finance costs 407 300
Exceptional finance income (1,571) -
Loss on disposal of fixed assets 345 26
Depreciation of property, plant
and equipment 566 914
Amortisation of intangible assets 51 159
Impairment of Intangible and tangible
assets - 1,473
Operating cash inflow/(outflow) 219 (787)
-------------- --------------
(Increase)/Decrease in inventories (9) 234
Decrease in receivables 64 71
(Decrease)/Increase in payables (274) 4
Increase/(Decrease) in provisions - (64)
Cash generated from operations - (542)
-------------- --------------
Interest paid (407) (209)
Net cash expenditure from operating
activities (407) (751)
-------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds on disposal of property,
plant and equipment 18 -
Purchase of property, plant and
equipment (135) (596)
Net cash used in investing activities (117) (596)
-------------- --------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings net of
costs 1,373 -
Repayment of borrowings (269) (219)
Net finance lease payments (60) (86)
Proceeds from issue of shares 112 1,124
Net cash generated from financing
activities 1,156 819
-------------- --------------
NET INCREASE/(DECREASE)
IN CASH AND CASH EQUIVALENTS 632 (528)
-------------- --------------
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning
of year (343) 185
Cash and cash equivalents at the
end of the year 289 (343)
Cash and cash equivalents comprise:
Cash 289 292
Overdrafts - (635)
-------------- --------------
289 (343)
============== ==============
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ended 31 December 2016
1 Presentation of financial statements
General information
Uvenco UK plc is a public limited company incorporated in
England and Wales under the Companies Act (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.
Basis of preparation
These consolidated financial statements are presented on the
basis of International Financial Reporting Standards (IFRS) as
adopted by the European Union and interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC)
and have been prepared in accordance with AIM rules and the
Companies Act 2006, as applicable to companies reporting under
IFRS.
These consolidated financial statements have been prepared in
accordance with the accounting policies set out in Note 2.
All companies in the Group use sterling as presentational and
functional currency. The financial period represents the nine
months to 31 December 2016 (prior financial period is the year
ended 31 March 2016).
Going concern
Accounting standards require the Directors to consider the
appropriateness of the going concern basis when preparing the
financial statements and if necessary to explain how they have
reached their conclusion. The Directors have taken notice of the
Financial Reporting Council guidance on the going concern basis of
accounting and reporting on solvency and liquidity risks
The Group made a profit after tax of GBP0.4 million for the
period ended 31 December 2016 and had net current liabilities of
GBP1.9 million and net assets of GBP1.0 million as at that date.
During the period the Group re-financed with Reward Invoice Finance
Limited ("Reward") and was able to write off GBP1.6 million of bank
borrowings, overdrafts and unpaid finance costs through negotiation
with its predecessor lenders. The total Group net debt has
therefore reduced significantly to approximately GBP1.5 million.
Provided the terms of the agreement are complied with the current
Reward facility of GBP1.1 million will remain in place until an
extended date of 31 August 2018, after which it can be called in at
one month's notice. The agreement may be terminated by the Company
by giving one month's notice should alternative finance be
found.
Management have prepared a cash flow forecast for the period to
31 December 2018. Whilst the Directors have continued to reduce the
operating costs of the Group and improve the performance of the
vending estate there was limited cash headroom in the forecast
based on the above extension to the Group's existing facility.
As a result of the above, on 27 June 2017, an additional three
year loan facility of GBP1.0m was agreed with Cleitus Investments
Limited (CIL), a wholly owned subsidiary of Uvenco Russia LLC and
member of the Belotserkovsky concert party. The facility has been
fully drawn down in order to provide support for the Group's
working capital position.
In order to satisfy themselves that the going concern basis
remains appropriate the Directors have taken into account the above
facility from Cleitus Investments Limited and the personal
guarantee given by the Group's majority shareholder Mr
Belotserkovsky to Reward, in respect of the financing facility,
should a breach in the terms of that facility occur.
Mr Belotserkovsky has undertaken not to call in any amounts due
to him, or any entity controlled by him, by the Group should that
guarantee, in respect of the Reward facility, be called upon, for a
period up to at least 31 August 2018. Furthermore, the new loan
from Cleitus Investments Limited is repayable in equal quarterly
instalments beginning September 2019.
Finally, Mr Belotserkovsky has provided a letter of intent that
Partner Invest LLC, a company owned and controlled by his family
will provide up to a maximum of GBP500,000 to provide additional
funds to the Company should such funds be required. The letter of
intent and the undertaking not to recall any amounts advanced under
the guarantee are not legally binding. The board are also
considering further options to realise cash from the Group's asset
base should it be required to fund further working capital
requirements.
Based on the above the directors have concluded that there are
no material uncertainties that lead to significant doubt upon the
group and company's ability to continue as a going concern meeting
their liabilities as they fall due. The financial statements have
therefore been prepared on a going concern basis.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not effective for the period ended 31 December
2016 and therefore have not been applied in preparing these
accounts. The effective dates shown are for periods commencing on
the date quoted.
IFRS 9 Financial Instruments and subsequent amendments
On 24 July 2014, the IASB published the complete version of IFRS
9, Financial instruments, which replaces most of the guidance in
IAS 39. This includes amended guidance for the classification and
measurement of financial assets by introducing a fair value through
other comprehensive income category for certain debt instruments.
It also contains a new impairment model which will result in
earlier recognition of losses. No changes were introduced for the
classification and measurement of financial liabilities, except for
the recognition of changes in own credit risk in other
comprehensive income for liabilities designated at fair value
through profit or loss. IFRS 9 also includes a new hedging
guidance. It will be effective for annual periods beginning on or
after 1 January 2018.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 specifies how and when a company will recognise revenue
as well as requiring such entities to provide users of financial
statements with more informative, relevant disclosures. The
standard provides a single, principles--based five--step model to
be applied to all contracts with customers as follows:
-- Identify the contract(s) with a customer
-- Identify the performance obligations in the contract
-- Determine the transaction price
-- Allocate the transaction price to the performance obligations in the contract
-- Recognise revenue when (or as) the entity satisfies a performance obligation.
IFRS 15 was issued in May 2014 and will be effective 1 January
2018, This replaces IAS 11-Construction Contracts, IAS 18-Revenue,
IFRIC 13-Customer Loyalty Programmes, IFRIC 15-Agreements for the
Construction of Real Estate, IFRIC 18-Transfers of Assets from
Customers and SIC 31-Revenue-Barter Transactions involving
Advertising Services.
IFRS 16, Leases
On January 13, 2016, the IASB issued IFRS 16, Leases, which
provides lease accounting guidance. Under the new guidance, lessees
will be required to present right-of-use assets and lease
liabilities on the statement of financial position. At the lease
commencement date, a lessee is required to recognise a lease
liability, which is the lessee's discounted obligation to make
lease payments arising from a lease, as well as a right of use
asset, representing the lessee's right to use, or control the use
of, a specified asset for the lease term. IFRS 16 is effective for
annual reporting periods beginning on or after January 1, 2019,
subject to endorsement by the European Union.
Earlier application is permitted for entities that apply IFRS
15, Revenue from Contracts with Customers, at or before the initial
application of IFRS 16.
The directors are currently reviewing the impact of the
above-mentioned Standards and Interpretations. The review of the
IFRS 15 impact is in progress and a conclusion has yet to be drawn.
The directors consider that IFRS 16 will have a material impact on
the financial statements due to the number of off balance sheet
lease arrangements open at the effective date.
The other standards, interpretations and amendments issued by
the IASB (of which some still subject to endorsement by the
European Union), but not yet effective are not expected to have a
material impact on the Group's future consolidated financial
statements.
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 are
as follows:
-- An impairment of intangible and tangible fixed assets has the
potential to significantly impact upon the Group's statement of
comprehensive income for the year. In order to determine whether
impairments are required the Directors estimate the recoverable
amount of the intangibles. This calculation is based on the cash
flow forecasts applicable to the Group of cash-generating units for
the following financial year extrapolated over a five year period
assuming no growth. A discount factor, based upon the Group's
weighted average cost of capital is applied to obtain a current
value ('value in use'). The fair value less costs to sell of the
cash generating unit is used if this results in an amount in excess
of value in use. Any potential impairment is allocated first
against intangible fixed assets and then against tangible fixed
assets.
-- Estimated future cash flows for impairment calculations are
based on management's expectations of future volumes and margins
based on plans and best estimates of the productivity of the income
generating unit in their current condition. Future cash flows
therefore exclude benefits from major expansion projects requiring
future capital expenditure. These cashflows and discount rates have
been sensitised to assess the impact of a variety of scenarios
-- Future cash flows are discounted using a discount rate based
on the Group's weighted average cost of capital. The weighted
average cost of capital is impacted by estimates of interest rates,
equity returns and market related risks. The Group's weighted
average cost of capital is reviewed on an annual basis. The net
book value of tangible and intangible assets are shown in Note 12
and Note 13 respectively.
-- 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 net book value of property, plant and equipment is
shown in Note 12).
-- 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. Where conditions
have been met these are recognised within income.
-- The sales from vending machines disclosed 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 period end date.
-- The convertible loan notes disclosed in Note 17 has not been
split between the debt and equity element on the basis that it is
not material to the Company or the Group.
2 significant accounting policies
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the Group's financial statements.
a) Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and its subsidiary undertakings. The
merger method of accounting was adopted in respect of the Group
reconstruction involving Uvenco UK Plc and SnackTime UK Limited.
The acquisitions of Snack in a Box Limited and Vendia UK Limited
were accounted for using acquisition accounting in accordance with
IFRS 3 "Business Combinations (Revised)".
Intra-group revenues and profits are eliminated on consolidation
and all revenue and profit figures relate to external transactions
only.
b) Cost of sales
Cost of sales represents amounts payable for supplies of
products for resale.
Certain site and location owners are paid rebates based on the
revenue generated from those vending machines in lieu of site
rentals. The amounts due are recognised as a cost of sale in the
period in which the revenue has been generated as a turnover based
rental.
Prior year adjustment
In previous periods turnover based rent was accounted for as a
deduction from revenue. During the year the directors reassessed
this accounting treatment and concluded that turnover based rent
should be presented as an expense within cost of sales.
As a result the prior year revenue and cost of sales figures
have been restated resulting in an increase in both by GBP575,000.
This adjustment is a presentational reclassification only, there is
no impact on the gross profit, net profit, cash flows or net assets
of the group in either the current or prior year.
c) Revenue recognition
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 (brand fees) is recognised at the date of
installation or refurbishment provided all of the stipulated
conditions have been met. If the conditions have not been met at
the date of installation or refurbishment the revenue will be
recognised only when the Directors assess that the conditions have
been met. Franchising fees are recognised when the franchisee
starts trading.
d) Income tax
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting periods, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This
involves comparison of the carrying amount of assets and
liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, or on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax liabilities are provided for in full. Deferred tax
assets and liabilities are calculated without discounting, at tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (tax laws)
that have been enacted or substantively enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the income statement,
except where they relate to items that are charged or credited
directly to equity in which case the related deferred tax is also
charged or credited directly to equity.
Tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as
deferred tax assets. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be
available against which the asset can be recognised and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
e) Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment provisions.
Depreciation is provided to write off the cost, less the
estimated residual value of property, plant and equipment by equal
instalments over their estimated useful economic lives as
follows:
Leasehold improvements - over the term of the lease
Plant & machinery - 10 - 25% straight line basis
Fixtures, fittings & equipment - 25% straight line basis
Motor vehicles - 25% straight line basis
Buildings - 2 - 4% straight line basis
Impairment reviews of property, plant and equipment are
undertaken if there are indications that the carrying values may
not be recoverable or that the recoverable amounts may be less than
the asset's carrying value.
f) Intangible assets
In accordance with 'IFRS 3 Business Combinations (Revised)', an
intangible asset acquired in a business combination is deemed to
have a cost to the Group of its fair value at the acquisition
date.
After initial recognition, intangible assets are carried at
deemed cost less any accumulated amortisation and any accumulated
impairment losses. Impairment reviews are conducted annually from
the first anniversary following acquisition, where indicators of
impairment arise.
Brands are amortised to the income statement over their
estimated economic life on a reducing balance basis. The average
useful economic life of brands has been estimated at 15 years.
f) Invoice discounting
The invoice discounting facility has been provided with a right
of recourse whereby the obligation following non-performance of the
secured debtor balance remains with Uvenco. As such, the trade
receivables impacted have not been de-recognised.
g) Impairment of assets
Assets that are subject to amortisation are reviewed for
impairment indicators annually and when events or circumstances
suggest that the carrying amount may not be recoverable, an
impairment test is performed. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its
recoverable amount.
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in the statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss is recognised immediately in the
statement of comprehensive income, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase. Impairment
losses on goodwill are not reversed.
The gain or loss arising on the disposal of an asset is
determined as the difference between the disposal proceeds and the
carrying amount of the asset and is recognised in the income
statement.
h) Leases
Where a lease is entered into which entails taking substantially
all the risks and rewards of ownership of an asset, the lease is
treated as a Finance lease. The asset is recorded in the balance
sheet as an item of property, plant and equipment and is
depreciated over the shorter of its estimated useful life or the
term of the lease.
Future instalments under such leases, net of finance charges,
are included within payables. Rentals payable are apportioned
between the finance element, which is charged to the income
statement, and the capital element, which reduces the outstanding
obligation for future instalments. Land and building elements of
lease agreements are separately assessed in accordance with IAS
17.
All other leases are treated as operating leases and the rentals
payable are charged on a straight line basis to the income
statement over the lease term.
i) Inventories
Inventories are stated at the lower of purchase cost from third
parties and net realisable value on a first in first out basis.
Costs of ordinarily interchangeable items are assigned using the
first in, first out cost formula.
j) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
k) Share-based payments
The Group has applied the requirements of IFRS 2 'Share-based
payment'.
The Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at fair
value (excluding the effect of non market-based vesting conditions)
at the date of grant. Where services are from employees fair value
is determined indirectly by reference to the fair value of the
instrument granted. The fair value determined at the grant date of
the equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any
cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital and
share premium.
Fair value is measured based upon a Black-Scholes pricing
model.
l) Financial instruments
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes a party
to the contractual provisions of the instrument. Financial
liabilities are recorded initially at fair value, net of direct
issue costs.
Financial liabilities are subsequently recorded at amortised
cost using the effective interest method, with interest-related
charges recognised as an expense in finance costs in the income
statement. Finance charges, including premiums payable on
settlement or redemption and direct issue costs, are charged to the
income statement on an accruals basis using the effective interest
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they
arise.
A financial liability is derecognised only when the obligation
is extinguished, that is, when the obligation is discharged or
cancelled or expires.
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual terms of the instrument.
Bank borrowings
Bank loans and overdrafts are initially recorded at fair value.
Finance charges including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals
basis to the income statement using the effective interest method
and are added to the carrying value of the instrument to the extent
that they are not settled in the period in which they arise.
Convertible Loan
The convertible loan notes disclosed in Note 17 have not been
split between the debt and equity element on the basis that it is
not material to the Company or the Group.
Trade payables
Trade payables are not interest bearing and are stated at their
fair value on initial recognition. They are then accounted for
using the effective interest rate method.
The Group classifies all its financial assets into one of the
following categories, depending on the purpose for which the asset
was acquired. The Group's accounting policy for each category is as
follows:
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They arise principally through the provision of goods and
services to customers (trade receivables), but also incorporate
other types of contractual monetary asset.
Trade receivables are initially recognised by the Group and
carried at original invoice amount less an allowance for any
uncollectible or impaired amounts. An estimate for doubtful debts
is made when collection of the full amount is no longer probable.
Bad debts are written off when they are identified as being bad.
Other receivables are recognised at fair value.
Cash and cash equivalents in the statement of financial position
comprise cash at bank, cash in hand and short term deposits with an
original maturity of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Group's cash
management are included as a component of cash and cash equivalents
for the purposes of the consolidated cash flow statement.
Impairment is recognised if there is objective evidence that the
balance will not be recovered.
The Group's loans and receivables comprise trade and other
receivables and cash and cash equivalents in the statement of
financial position.
m) Equity instruments
Equity instruments, which are detailed below, issued by the
Group are recorded at the proceeds received, net of direct costs
except for warrants, share options and convertible loans which are
recorded at fair value at the time of issue.
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares.
-- "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue.
-- "Capital redemption reserve" which arose on the redemption of shares.
-- "Retained earnings" represents retained profits.
-- "Share option reserve" relates to the Company's share option scheme detailed in Note 21.
-- "Warrants reserve" represents the fair value at the time the warrants were issued.
n) Pensions
The Group did not contribute to personal pension plans for the
Directors. Contributions were made to defined contribution pension
schemes for certain employees. The amount charged to the Income
Statement in the year represents the amount payable in respect of
that year.
o) Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer.
p) Exceptional Items
It is the Group's policy to show items that it considers are
non-recurring and of a significant nature separately on the face of
the Consolidated Statement of Comprehensive Income in order to
assist the reader to understand the financial statements. The Group
defines exceptional items as those that are material in respect of
their size and nature, for example, a major restructuring of the
activities of the Group.
Summary details of exceptional costs and income are shown in
Note 5 and Note 6.
q) Invoice discounting facility
The invoice discounting facility has been provided with a right
of recourse whereby the obligation following non-performance of the
secured debtor balance remains with Uvenco. As such, the trade
receivables impacted have not been de-recognised.
3 revenue
The total turnover of the Group for the period/year has been
derived from the principal activities.
The geographical analysis of the Group's turnover is as
follows:
9 months 12 months
ended 31 ended
December 31 March
2016 2016 (Restated)
GBP000 GBP000
United Kingdom 10,512 15,728
European Union excluding United
Kingdom 169 107
Other export 176 57
10,857 15,892
========== =================
4 auditor's remuneration
The analysis of auditor's remuneration is as follows:
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
Fees payable to the Company's auditors
for the
audit of the Company's financial
statements
Total audit fees 45 55
Fees payable to the Group's auditors
for other
services to the Group
The audit of the Company's subsidiaries
pursuant to legislation 38 55
Other services in relation to taxation - 15
All other services 6 20
44 90
89 145
========== ==========
5 loss from operations
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
This is stated after charging/(crediting):
Depreciation of property, plant
and equipment
- owned by the Group 522 855
- held under finance leases 44 59
Loss on disposal of property, plant
and equipment 345 26
Exceptional costs 105 1,787
Amortisation of intangible assets 51 159
Rentals under operating leases:
- Land and building 108 115
- Plant and machinery 281 545
========== ==========
Exceptional costs comprise of:
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
Restructuring and redundancy costs 97 169
Property costs relating to relocation - 22
Professional fees on restructuring 8 91
Impairment of fixed assets - 1,156
Impairment of intangible assets - 317
Refinancing costs - 32
Exceptional costs included in administration 105 1,787
========== ==========
costs and operating loss
Exceptional costs in 2016 denoted as restructuring and
redundancy costs are connected with the continued restructuring of
the Group.
The impairment of intangible assets for the year ended 31 March
2016 relates to the brand and customer list intangibles as well as
an impairment to the specialist drinks division. The impairments
arose following difficult trading conditions and the loss of a key
customer.
6 finance income and expenses
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP GBP
Interest on bank loans and overdrafts 316 172
Interest on other loans 40 96
Interest on obligations under finance
leases 51 32
407 300
---------- ----------
During the period the Group made an exceptional gain of GBP1.6
million after agreeing to settle a loan, overdraft and unpaid
finance costs of GBP2.6 million for a consideration of GBP1.0
million.
7 directors' remuneration
The emoluments of the Directors for the period were as
follows:
Salary Fees Total Total
9 months 9 months 9 months 12 months
ended ended ended ended
31 December 31 December 31 December 31 March
2016 2016 2016 2016
GBP GBP GBP GBP
Non-Executive Directors
J Hamer 23 - 23 30
M Jackson - 15 15 20
G White (resigned 24
July 2015) - - - 5
Executive Directors
S Kornienko 45 - 45 -
T James - - - 95
M Stone (resigned 31
March 2016) - - - 124
Directors' remuneration 68 15 83 274
------------- ------------- ------------- ----------
NIC 2 25
Total 85 299
============= ==========
Boris Belotserkovsky took no salary in the nine month period
ended 31 December 2016 (12 month period ended 31 March 2016 -
Nil)
Key management personnel in this regard are considered to be
only the Company's Directors.
During the nine month period ended 31 December 2016 pension
contributions of GBPNil (12 month period ended 31 March 2016 -
GBPNil) were paid in respect of the highest paid Director.
Directors' interests in share options
The mid-market price of the ordinary shares on 31 December 2016
was 4.0 pence and the range during the period was 4.0 pence to 9.0
pence.
No Directors exercised any options during the period and no
Directors held any share options at the period end.
8 staff numbers and costs
The average monthly number of people employed by the Group
(including Executive Directors) during the year, analysed by
category, were as follows:
9 months 12 months
ended 31 ended
December 31 March
2016 2016
Operational staff 139 144
Administrative staff 49 45
188 189
========== ==========
The aggregate payroll costs were as follows:
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
Wages, salaries and fees 3,242 4,336
Social security costs 287 402
Pension costs 78 126
3,607 4,864
========== ==========
9 segment information
The Group has three main reportable segments:
-- Vending - Vending activities which includes the aggregation
of the Group's three Vending depots
-- Franchising - The marketing and franchising of operations in
the provision of snack solutions
-- Specialist drinks - The manufacture and sale of single
portion beverages called 'Drinkpacs' together with the sale of
associated food and drink products.
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.
Details are provided in the reconciliation from segment assets and
liabilities to the Group position.
Segmental Profit and Loss
- 9 months ended 31 December Specialist
2016 drinks Franchising Vending Total
9 months 9 months 9 months 9 months
ended 31 ended 31 ended 31 ended 31
December December December December
2016 2016 2016 2016
GBP GBP GBP GBP
Revenue
Total revenue 1,872 907 8,556 11,335
Inter-segmental revenue - - (478) (478)
----------- ------------ ---------- ----------
Group's revenue per consolidated 1,872 907 8,078 10,857
=========== ============ ========== ==========
statement of comprehensive
income
Depreciation (153) (22) (391) (566)
Amortisation - (51) - (51)
=========== ============ ========== ==========
Segmental operating profit/(loss)
before
exceptional items but after
impairment (42) 390 (330) 18
charges
=========== ============ ========== ==========
Exceptional costs included
within
administration expenses
(Note 5) (105)
Head office costs (656)
Finance expense (Note 6) (407)
Finance income (Note 5) 1,571
Group profit before tax 421
==========
Segmental Profit and Loss 12 Specialist
months ended 31 March 2016 drinks Franchising Vending Total
12 months 12 months 12 months
ended 12 months ended ended
31 March ended 31 31 March 31 March
2016 March 2016 2016 2016
GBP GBP GBP GBP
Revenue
Total revenue 2,355 1,400 12,509 16,264
Inter-segmental revenue - - (371) (371)
----------- ------------ ---------- ----------
Group's revenue per consolidated 2,355 1,400 12,138 15,893
=========== ============ ========== ==========
statement of comprehensive income
Depreciation (193) (55) (666) (914)
Amortisation - 210 (368) (158)
Impairment - - (1,473) (1,473)
=========== ============ ========== ==========
Segmental operating loss/(profit)
before (48) 428 35 415
exceptional items
=========== ============ ========== ==========
Segmental operating (loss)/profit
before exceptional (48) 428 (1,438) (1,058)
items but after impairment charges
=========== ============ ========== ==========
Exceptional costs included within administration
expenses (314)
and finance expense (Note 5)
Head office costs (1,987)
Finance expense (300)
Group loss before tax (3,659)
==========
SEGMENTAL ASSETS
AND LIABILITIES 31 Specialist
DECEMBER 2016 drinks Franchising Vending Head office Total
31 December 31 December 31 December 31 December 31 December
2016 2016 2016 2016 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Additions to non-current
assets 100 5 196 9 310
------------ ------------ ------------ ------------ ------------
Reportable segment
assets 1,015 246 4,751 609 6,621
------------ ------------ ------------ ------------ ------------
Total Group assets 1,015 246 4,751 609 6,621
============ ============ ============ ============ ============
Reportable segment
liabilities (601) (109) (2,961) (1,264) (4,935)
============ ============ ============ ============ ============
Loans and borrowings (excluding leases, loan notes and
overdrafts) (480)
Deferred tax liabilities (224)
Total Group liabilities (5,639)
============
SEGMENTAL ASSETS
AND LIABILITIES 31 Specialist
MARCH 2016 drinks Franchising Vending Head office Total
12 months 12 months 12 months 12 months 12 months
ended 31 ended 31 ended 31 ended 31 ended 31
March 2016 March 2016 March 2016 March 2016 March 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Additions to non-current
assets 63 - 763 - 826
------------ ------------ ------------ ------------ ------------
Reportable segment
assets 887 147 5,360 956 7,350
------------ ------------ ------------ ------------ ------------
Total Group assets 887 147 5,360 956 7,350
============ ============ ============ ============ ============
Reportable segment
liabilities (474) (198) (4,521) (1,100) (6,293)
============ ============ ============ ============ ============
Loans and borrowings (excluding leases, loan notes and
overdrafts) (1,832)
Deferred tax liabilities (239)
Total Group liabilities (5,852)
============
As at 31 December 2016 there were GBPnil non-current assets held
outside of the United Kingdom (31 March 2016: GBPNil).
10 taxation
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
Current Tax
Current tax on profit for the year 81 -
Total current tax 81 -
---------- ----------
Deferred tax (see note 14)
Origination and reversal of timing
differences (1) (94)
Change in tax rate (13) (42)
Total deferred tax (14) (136)
---------- ----------
Taxation charge/(credit) on profit
on ordinary activities 67 (136)
========== ==========
Factors affecting tax (credit)/charge for the year:
The tax assessed for the year differs from the standard rate of
corporation tax in the UK of 20% (2015: 20%). The differences are
explained below:
9 months 12 months
ended 31 ended
December 31 March
2016 2016
GBP000 GBP000
TAX RECONCILIATION
Profit/(Loss) per accounts before
taxation 421 (3,659)
---------- ----------
Tax on profit/(loss) on ordinary
activities at standard
rate of 20% (12 months ended 31
March 2016 - 20%) 84 (732)
Expenses not deductible for tax
purposes 15 97
Ineligible depreciation (14) (27)
Unrecognised deferred tax (46) 484
Change in rate 13 42
Other permanent differences 15 -
Total tax charge/(credit) for the
year 67 (136)
========== ==========
There were no factors that may affect future tax charges.
11 EARNINGS/(LOSS) PER SHARE
The calculation of basic earnings/(loss) per share is calculated
on the basis of the result for the year after tax, divided by the
weighted average number of shares in issue for the period ended 31
December 2016 of 75,530,786 (12 month period ended 31 March 2016 -
43,332,623).
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all potential dilutive ordinary. Potential dilutive
ordinary shares arise from share options and convertible loans. For
these, a calculation is performed to determine the number of shares
that could have been acquired at fair value (determined as the
average annual market share price of the Company's shares) based on
the monetary value of the exercise price attached to outstanding
share options. Thus the dilutive weighted average number of shares
considers the number of shares that would have been issued assuming
the exercise of the share options. If these are proved to be
anti-dilutive (increase the potential earnings per share) they are
omitted from the calculation. As the Group made a loss in the year
ended 31 March 2016 the options, warrants and convertible loan
notes are therefore anti-dilutive and diluted earnings per share is
therefore not provided for the prior year.
Period ended 31 December Period ended 31 March
2016 2016
Weighted Weighted
average Amount average Amount
no. of per share no. of per share
Profit shares (pence) (Loss) shares (pence)
(GBP) (GBP)
Profit/(Loss)
attributable
to ordinary
shareholders 354,000 75,530,786 0.5 (3,522,608) 43,332,623 (8.1)
Diluted EPS
Warrants 1,239,872
Share options 92,857
Diluted EPS 76,863,515 0.5
=========== ===========
12 property plant and equipment
Fixtures,
Land Plant Fittings
and Leasehold and Motor and
Buildings improve- machinery vehicles equipment Total
ments
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 27 March 2015 529 83 8,538 30 290 9,470
=================== ========== ========== ========== ========= ========== ========
Additions - - 663 62 101 826
Disposals - - (1,184) - - (1,184)
At 31 March 2016 529 83 8,017 92 391 9,112
=================== ========== ========== ========== ========= ========== ========
Additions - - 249 35 26 310
Disposals (69) (83) (711) (4) (78) (945)
At 31 December
2016 460 - 7,555 123 339 8,477
=================== ========== ========== ========== ========= ========== ========
Depreciation
At 27 March 2015 67 37 4,310 25 229 4,668
=================== ========== ========== ========== ========= ========== ========
Charge for the
year 15 12 828 20 39 914
Impairment charge - - 1,156 - - 1,156
Disposals - - (1,158) - - (1,158)
At 31 March 2016 82 49 5,136 45 268 5,580
=================== ========== ========== ========== ========= ========== ========
Charge for the
year 14 - 475 15 62 566
Disposals (95) (49) (363) - (76) (583)
At 31 December
2016 1 - 5,248 60 254 5,563
=================== ========== ========== ========== ========= ========== ========
Net Book Value
At 31 December
2016 459 - 2,307 63 85 2,914
=================== ========== ========== ========== ========= ========== ========
At 31 March 2016 447 34 2,881 47 123 3,532
=================== ========== ========== ========== ========= ========== ========
At 27 March 2015 462 46 4,228 5 61 4,802
------------------- ---------- ---------- ---------- --------- ---------- --------
The net book value of assets held under finance leases or hire
purchase contracts, included above, are as follows:
31 December 31 March
2016 2016
GBP000 GBP000
Plant and machinery 272 313
Motor vehicles 72 49
344 362
============ =========
13 intangible assets
Goodwill Customer Brands Total
Relationships
GBP000 GBP000 GBP000 GBP000
Cost
At 28 March 2015, 31
March 2016
and 31 December 2016 9,546 1,116 4,958 15,620
========= ============== ======= =======
Amortisation and impairment
At 28 March 2015 9,546 988 3,839 14,373
--------- -------------- ------- -------
Amortisation charge
for the year - 74 85 159
Impairment charge for
the year - 54 264 318
At 31 March 2016 9,546 1,116 4,188 14,850
--------- -------------- ------- -------
Amortisation charge
for the year - - 51 51
At 31 December 2016 9,546 1,116 4,239 14,901
========= ============== ======= =======
Net book value
At 31 December 2016 - - 719 719
========= ============== ======= =======
At 31 March 2016 - - 770 770
========= ============== ======= =======
At 27 March 2015 - 128 1,119 1,247
========= ============== ======= =======
Current estimates of useful economic lives of intangible assets
are as follows:
Goodwill Indefinite (now fully impaired)
Customer relationships Amortised over 15 years (now fully impaired)
Snack in the Box brands Amortised over 15 years
Vendia brands Amortised over 10 years (now fully impaired)
14 Deferred tax
The gross movements on the deferred tax account are as
follows:
2016 2015
GBP000 GBP000
At the start of the year (238) (377)
Income statement credit 1 96
Change in tax rate 13 42
Prior year adjustment - 1
At the end of the year (224) (238)
======= =======
deferred tax provisions
Intangible Tangible
assets assets Total
GBP000 GBP000 GBP000
At 1 April 2016 138 100 238
Charged to income - current
year (1) - (1)
Change in tax rate (7) (6) (13)
At 31 December 2016 130 94 224
============================= =========== ========= =======
See Note 10 for details of the applicable tax rates applied.
Within the Group as at 31 December 2016 there were trading
losses of approximately GBP8,661,063 (31 March 2016 - approximately
GBP9,049,746) which have not been recognised as the Directors do
not foresee the utilisation of these losses in the foreseeable
future. These losses give rise to an unrecognised deferred tax
asset of GBP1,472,473 (31 March 2016: GBP1,628,054).
15 Inventories
31 December 31 March
2016 2016
GBP000 GBP000
Raw materials 149 153
Finished goods and goods for
resale 748 735
897 888
============ =========
GBP19,000 of inventory was written down in the current nine
month period ended 31 December 2016 (12 month period ended 31 March
2016- GBP179,000). The value of inventory consumed and recognised
as an expense in the nine month period ended 31 December 2016 was
GBP4,018,000 (12 month period ended 31 March 2016 -
GBP6,690,000).
16 trade and other receivables
31 December 31 March
2016 2016
GBP000 GBP000
Trade receivables 1,526 1,528
Other receivables, prepayments
and accrued income 276 338
1,802 1,866
============ =========
The recoverability of receivables is not considered to be a
significant issue to the Group. Many of the Group's customers have
a long standing relationship with the Group and debtors are
reviewed on a regular basis, with appropriate credit checks being
carried out on new customers entering into contracts with the
Group.
Some of the trade receivables are past due but not impaired as
at 31 December 2016. The ageing analysis of these trade receivables
is as follows:
31 December 31 March
2016 2016
GBP000 GBP000
Current 530 682
One month overdue 615 621
Two to six months overdue 324 225
Over six months overdue 57 -
1,526 1,528
============ =========
As at 31 December 2016 trade receivables of GBP309,000 (31 March
2016 - GBP300,000) were past due and impaired. The receivables due
at the end of the financial year relate to trading customers,
brands and franchisees.
31 December 31 March
2016 2016
GBP000 GBP000
Bad debt provision brought forward 300 156
------------ ---------
Additional provision 9 144
Provision released against debt
written off - -
Bad debt provision carried forward 309 300
============ =========
17 borrowings
31 December 31 March
2016 2016
GBP000 GBP000
Borrowings at amortised cost
Bank overdrafts - 635
Bank loans - 1,832
Invoice discount facility 1,134 -
Convertible loan notes 40 40
Redeemable loan notes 40 40
Other loans 400 -
Finance leases 197 251
1,811 2,798
============ =========
Amounts due for settlement within
12 months
Bank overdrafts - 635
Bank loans - 560
Invoice discount facility 1,134 -
Finance leases 178 227
1,312 1,422
------------ ---------
Amounts due for settlement after
12 months
Bank loans - 1,272
Convertible loan notes 40 40
Redeemable loan notes 40 40
Finance leases 19 24
Other loans 400 -
499 1,376
------------ ---------
1,811 2,798
============ =========
Terms and conditions of outstanding loans at the period end were
as follows:
31 December 31 March
Interest rate Year of maturity 2016 2016
% GBP000 GBP000
Redeemable loan notes 12% Fixed 2018 40 40
Convertible loan notes 7% Fixed 2018 40 40
2.75% over base
Bank overdraft rate 2016 - 635
Bank loan 6% over LIBOR 2018 - 1,832
Invoice discount facility 21% fixed 2017 1,213 -
Cleitus loan 8% fixed 2018 400 -
The fair value in each case equates to the carrying book value
with the exception of the convertible loan note. All loans are
denominated in sterling. The main loan from Reward Invoice Finance
Limited is secured against the debtors and fixed assets of the
Group. All other loans are unsecured.
The analysis below shows the gross cash flows for the bank loan
and loan notes, which may differ to the carrying values of the
liabilities at the balance sheet date.
31 December 31 March
2016 2016
GBP000 GBP000
Amounts payable under bank loans
& loan notes
Within one year 1,468 645
1-2 years 536 -
2-5 years - 1,306
2,004 1,951
============ =========
Obligation under finance leases
31 December 31 March
2016 2016
GBP000 GBP000
Amounts payable under finance leases
Within one year 121 134
Two to five years 87 137
Less future finance charges (11) (20)
------------ ---------
Present value of lease obligations 197 251
------------ ---------
Amounts due for settlement within
12 months 115 119
Amounts due for settlement after
2 - 5 years 82 132
============ =========
Hire purchase and finance lease liabilities are secured upon the
underlying assets.
It is the Group's policy to lease certain parts of its property,
plant and equipment under finance leases. For the period ended 31
December 2016 the average effective borrowing rate was 7% (12 month
period ended 31 March 2016 - 7%). Interest rates are fixed at the
contract dates. All leases are on a fixed repayment basis and no
arrangements have been entered into for contingent rental payments.
All lease obligations are denominated in sterling.
18 trade and other payables
31 December 31 March
2016 2016
GBP000 GBP000
Due within one year
Trade payables 1,847 2,079
Social security and other taxes 909 890
Other payables 317 62
Accruals and deferred income 531 765
3,604 3,796
============ =========
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and on-going costs. The Directors
consider that the carrying amount of trade payables approximates to
their fair value.
19 share capital
31 December 31 March
2016 2016
GBP000 GBP000
Allotted, called up and fully paid
equity share capital
At 31 December 2016 (ordinary
shares of GBP0.02 each) 1,529 1,492
============ =========
Type of Share Ordinary Share Total consideration
Date of Issue Issue Shares Number Price in period
GBP GBP
At 27 March
2015 32,149,014
---------------
May-15 Share issue 1,000,000 0.10 100,000
Dec-15 Share issue 21,000,000 0.05 1,050,000
Dec-15 Loan note conversion 16,446,451 0.10 -
Dec-15 Share issue 3,300,000 0.10 -
Feb-16 Loan note conversion 701,987 0.10 -
At 31 March
2016 74,597,452
---------------
Nov-16 Share issue 1,866,667 0.06 112,000
At 31 December 2016 76,464,119
---------------
20 share premium and reserves
Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal
value.
Capital redemption reserve Amounts transferred from share
capital on redemption of issued shares which arose following a
share reorganisation.
Share option reserve Cumulative share option expense recognised.
Warrant Cumulative fair value of warrants in issue.
Retained deficit Cumulative net gains and losses recognised in
the consolidated statement of comprehensive income.
21 equity-settled share option scheme
Options are exercisable at a price equal to the average quoted
market price of the Company's shares at the date of grant or as
agreed by the Directors on the date of the grant. The vesting
period is up to three years. If the options remain unexercised
after a period of ten years from the date of grant the options
expire. Options are forfeited if the option holder leaves the Group
before the options vest.
Details of the share options outstanding during the period/year
are as follows:
9 months 9 months 12 months 12 months
ended ended ended ended
31 December 31 December 31 March 31 March
2016 2016 2016 2016
Number Weighted Number Weighted
of share average of share average
options exercise options exercise
price price
(GBP) (GBP)
Outstanding at the beginning
of the period/year 600,000 0.05 1,000,000 0.73
Granted during the period/year - - 600,000 0.05
Forfeited during the period/year (150,000) - - -
Lapsed during the period/year - - (1,000,000) -
Outstanding at the end
of the period/year 450,000 0.05 600,000 0.05
------------- ------------- ------------ ----------
Exercisable at the end - - - -
of the period/year
============= ============= ============ ==========
The weighted average remaining contractual life of the options
outstanding at the period/year end, for the options with a weighted
average exercise price of GBP0.05, is 2.7 years. The weighted
average fair value of the options when issued was 2.5p.
31 December 31 March
2016 2016
Average share price 6.3p 8.1p
The inputs into the Black-Scholes option pricing model for the
share options issued were as follows:
Issue Date 24-Dec-15
Expected volatility 75%
Expected life 3 years
Risk-free rate 4%
Dividend yield -
Weighted average share
price on the grant date GBP0.08
Expected volatility was determined by calculating the historical
volatility of the Company's share price over the previous three
years. The expected life used in the model has been adjusted, based
on management's best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural
considerations.
Mrs Veronika Belotserkovsky, wife of Boris Belotserkovsky, a
non-executive Director of the Company, holds 1,816,557 8p Warrants
which are exercisable at 2p per share in ordinary equity.
22 financial instruments
The accounting policies for financial instruments have been
applied to the line items below:
Financial assets by category at amortised cost
31 December 31 March
2016 2016
GBP000 GBP000
Loans and receivables
Trade receivables 1,526 1,528
Cash and cash equivalents 289 292
1,815 1,820
============ =========
The maximum credit risk exposure is GBP1,526,000. (31 March 2016
- GBP1,528,000).
Financial liabilities at amortised costs by category
31 December 31 March
2016 2016
GBP000 GBP000
Current liabilities
Other financial liabilities 3,642 4,329
Non current liabilities
Other financial liabilities 629 1,376
4,271 5,705
------------ ---------
Interest rate sensitivity
The Group's policy is to minimise interest rate cash flow risk
exposures on their hire purchase and finance lease arrangements by
fixing the interest rate on the agreements. The Group does not have
any variable interest rate loans.
Information on the Group's risk and capital structure is
included within the Directors' Report.
Credit risk
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions as well as credit exposure in
relation to outstanding receivables. The Group policy is to spread
deposits over at least two institutions with investment grade A1 or
better (Standard & Poor's credit rating) and deposits are made
in sterling only. The Group does not expect any losses from
non-performance by these institutions
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. It is the
Group's aim to settle balances as they become due.
The Group's current financial position is such that the Board
does not consider there to be a short-term liquidity risk however
the Board will continue to monitor long term cash projections.
The following table sets out the contractual maturities
(representing undiscounted contractual cash-flows) of financial
liabilities:
31 December 2016 Up to Between Between Between Over
3
months 3 and 1 and 2 and 5 years
12 2 5
months years years
GBP000 GBP000 GBP000 GBP000 GBP000
Trade and other payables 1,848 - - - -
Accruals 207 - - - -
Invoice discounting facility - 1,468 - - -
Convertible loans - - 88 - -
Finance leases 39 80 83 10 -
Other loans - - 448 - -
Total 2,094 1,548 619 10 -
------- -------- -------- -------- --------
31 March 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Trade and other payables 2,079 - - - -
Accruals 936 - - - -
Bank loans - 602 1,367 - -
Overdrafts 683 - - - -
Convertible loans - - - 88 -
Finance leases 24 102 96 43 -
Total 3,722 704 1,463 131 -
------- -------- -------- -------- --------
23 operating lease arrangements
At the balance sheet date the Group had commitments for future
minimum lease payments under non-cancellable operating leases which
fall due as follows:
31 December 31 March
2016 2016
GBP000 GBP000
Within one year 386 564
2 to 5 years 371 454
Over 5 years - 28
757 1,046
============ =========
Operating lease payments represent rentals payable by the Group
in respect of its properties and for plant and machinery.
24 related party transactions
Related party transactions describe transactions with Directors,
and companies in which Directors have an interest.
During the nine month period ended 31 December 2016 there were
the following related party transactions involving a Director or a
Company related to a Director:
The following Directors purchased ordinary new shares of 2 pence
per share
Mrs B. Belotserkovsky 916,667 at a price of 6 pence per share
Mr J Hamer 250,000 at a price of 6 pence per share
Mr M Jackson 250,000 at a price of 6 pence per share
Mr P Goodman (Co Sec) 250,000 at a price of 6 pence per share
Mr M Maltby (outgoing Co Sec) 200,000 at a price of 6 pence per share
Unicum Holdings Limited, a company controlled by Boris
Belotserkovsky, a non-executive director of the Company, supplied
vending machines for use in the business and for resale. A total of
GBP89,238 was invoiced during the period.
On 11 January 2017, post year end, the company announced that it
had entered into a loan of GBP410,000 with Cleitus Investment
Limited (CIL) a wholly owned subsidiary of Uvenco Group in Russia.
Cleitus Investment Limited is a company owned and controlled by
Boris Belotserkovsky and therefore this constituted a related party
transaction. Prior to the period end, in November and December 2016
the Company received payments totalling GBP400,000 from CIL in
relation to this loan, which are reflected in the Company's
borrowings and net debt figures as at 31 December 2016
Key management costs are disclosed in Note 7 of these financial
statements.
25 capital commitments
There were no capital expenditure commitments as at the year
end.
26 ultimate controlling party
By virtue of his shareholding and relationships with certain
other shareholders in the "Concert Party" Boris Belotserkovsky is
the controlling party of the Group.
27 post balance sheet events
On 27 January 2017 the Group sold the warehouse and depot in
Corby. Consideration of GBP328,000 was received and a profit on
disposal of GBP201,000 will be recognised in the year ended 31
December 2017.
On 27 June 2017 an additional three year loan facility of
GBP1.0m at an interest rate of 8% per annum was agreed with the
Cleitus Investments Limited. The facility has been fully drawn down
and is repayable in four equal quarterly instalments from 30
September 2019.
Company Number: 06135746
UVENCO UK PLC
Company financial statements
PERIOD ended 31 December 2016
UVENCO UK PLC
company balance sheet
31 December 2016
Company number: 06135746
31 December 31 March
Notes 2016 2016
GBP000 GBP000
------------------------------- ------ ------------ ---------
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 3 30 44
Investments 4 3,629 6,867
3,659 6,911
------------ ---------
CURRENT ASSETS
Trade and other receivables 5 229 1,605
TOTAL ASSETS 3,888 8,516
============ =========
LIABILITIES
CURRENT LIABILITIES 6 (9,673) (9,912)
NET CURRENT LIABILITIES (9,444) (8,307)
------------ ---------
NON CURRENT LIABILITIES
Borrowings 7 (480) (1,352)
TOTAL LIABILITIES (10,153) (11,264)
------------ ---------
NET LIABILITIES (6,265) (2,748)
============ =========
EQUITY - ISSUED SHARE CAPITAL ATTRIBUTABLE
TO THE OWNERS OF THE PARENT
COMPANY
Share capital 8 1,529 1,492
Share premium account 9 12,796 12,722
Capital redemption reserve 9 1,274 1,274
Share option reserve 9 375 375
Warrant reserve 9 2,236 2,236
Retained deficit 9 (24,475) (20,847)
TOTAL EQUITY (6,265) (2,748)
============ =========
Under Section 408 of the Companies Act 2006 the Company is
exempt from the requirement to present its own profit and loss
account. The loss for the financial period, of the holding Company,
as approved by the Board, was GBP3,628,000 (12 month period ended
31 March 2016 - loss GBP3,780,000). These financial statements were
approved by the Board of Directors and authorised for issue on 29
June 2017. They were signed on its behalf by:
Sergei Kornienko
Director
The Notes on pages 65 to 75 form part of these financial
statements.
UVENCO UK PLC
company statement of changes in equity
31 December 2016
Company number: 06135746
Issued Share Capital Share Convertible
share premium redemption option debt option Warrant Retained
COMPANY capital account reserve reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 27 March
2015 643 10,401 1,274 375 147 2,236 (17,067) (1,991)
--------- --------- ------------ --------- ------------- --------- --------- --------
Issue of shares in the
year 440 684 - - - - - 1,124
Loan notes converted 409 1,636 - - - - - 2,045
Retained loss for the
year - - - - (147) - (3,780) (3,927)
Balance at 31 March
2016 1,492 12,721 1,274 375 - 2,236 (20,847) (2,749)
--------- --------- ------------ --------- ------------- --------- --------- --------
Issue of shares in the
year 37 75 - - - - - 112
Retained loss for the
year - - - - - - (3,628) (3,628)
Balance at 31 December
2016 1,529 12,796 1,274 375 - 2,236 (24,475) (6,265)
========= ========= ============ ========= ============= ========= ========= ========
The notes on pages 65 to 75 form part of these financial
statements
UVENCO UK PLC
notes to the financial statements
31 December 2016
Company number: 06135746
1 accounting policies
a) Basis of accounting
The financial statements have been prepared under the historical
cost convention and with Financial Reporting Standard 100
Application of Financial Reporting Requirements ("FRS 100") and
Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS
101")
In preparing these financial statements the Company has taken
advantage of all disclosure exemptions conferred by FRS 101.
Therefore these financial statements do not include:
-- certain comparative information as otherwise required by EU-endorsed IFRS;
-- certain disclosures regarding the Company's capital;
-- a statement of cash flows;
-- the effect of future accounting standards not yet adopted;
-- the disclosure of the remuneration of key management personnel; and
-- disclosures of related party transactions with other
wholly-owned members of Uvenco UK plc group of companies.
In addition, and in accordance with FRS 101 further disclosure
exemptions have been adopted because equivalent disclosures are
included in the Company's consolidated financial statements. These
financial statements do not include certain disclosures in respect
of:
-- share-based payments; or
-- financial instruments
The Company has chosen not to prepare a note to the financial
statements relating to financial instruments as the information is
available in the published financial statements of the Group.
The financial statements have been prepared on a going concern
basis. The Company had net liabilities of GBP6,265,000 at the
balance sheet date (31 March 2016: GBP2,748,000).
Accounting standards require the Directors to consider the
appropriateness of the going concern basis when preparing the
financial statements and if necessary to explain how they have
reached their conclusion. The Directors have taken notice of the
Financial Reporting Council guidance 'Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies.
The Group made a profit after tax of GBP0.5 million for the
period ended 31 December 2016 and had net current liabilities of
GBP1.9 million and net assets of GBP1.0 million as at that date.
During the period the Group re-financed with Reward Invoice Finance
Limited ("Reward") and was able to write off GBP1.6 million of bank
borrowings, overdrafts and unpaid finance costs through negotiation
with its predecessor lenders. The total Group net debt has
therefore reduced significantly to approximately GBP1.5 million.
Provided the terms of the agreement are complied with the current
Reward facility of GBP1.1 million will remain in place until August
2018, after which it can be called in at one month's notice. The
agreement may be terminated by the Company by giving one month's
notice should alternative finance be found.
Management has prepared a cash flow forecast for the period to
December 2018. Whilst the Directors have continued to reduce the
operating costs of the Group and improve the performance of the
vending estate was limited cash headroom in the forecast.
As a result of the above, on 27 June 2017 an additional three
year loan facility of GBP1.0m was agreed with the Cleitus
Investments Limited (CIL), a wholly owned subsidiary of Uvenco
Russia LLC and member of the Belotserkovsky concert party. The
facility has been fully drawn down in order to provide support for
the Group's working capital position.
1 accounting policies (continued)
In order to satisfy themselves that the going concern basis
remains appropriate the Directors have taken into account the above
facility from Cleitus Investments Limited and the personal
guarantee given by the Group's majority shareholder Mr
Belotserkovsky to Reward, in respect of the financing facility,
should a breach in the terms of that facility occur. Mr
Belotserkovsky has undertaken not to call in any amounts due to
him, or any entity controlled by him, by the Group should that
guarantee, in respect of the Reward facility, be called upon, for a
period up to at least 31 August 2018. Furthermore, the new loan
from Cleitus Investments Limited is repayable in equal quarterly
instalments beginning September 2019.
Finally, Mr Belotserkovsky has provided a letter of intent that
Partner Invest LLC, a company owned and controlled by his family
will provide up to a maximum of GBP500,000 to provide additional
funds to the Company should such funds be required. The letter of
intent and the undertaking not to recall any amounts advanced under
the guarantee are not legally binding. The board are also
considering further options to realise cash from the Group's asset
base should it be required to fund further working capital
requirements.
Based on the above the directors have concluded that there are
no material uncertainties that lead to significant doubt upon the
group and company's ability to continue as a going concern meeting
their liabilities as they fall due. The financial statements have
therefore been prepared on a going concern basis.
b) Investments
Investments including the shares in subsidiary companies held as
fixed assets are stated at cost less any provision for impairment
in value. In relation to acquisitions, where advantage can be taken
of the merger relief rules, shares issued as consideration for
acquisitions are accounted for a nominal value
c) Tangible fixed assets
Tangible fixed assets are stated at historical cost less
accumulated depreciation and impairment provisions.
Depreciation is provided to write off the cost, less the
estimated residual value, of property, plant and equipment by equal
instalments over their estimated useful economic lives as
follows:
Fixtures, fittings & equipment - 25% straight line basis
d) Convertible loan
The convertible loan notes disclosed in Note 7 has not been
split between the debt and equity element on the basis that it is
not material to the Company or the Group.
e) Provisions
The Group recognises a provision where a legal or constructive
obligation exists at the balance sheet date and a reliable estimate
can be made of the likely outcome.
1 accounting policies (continued)
f) Share-based payments
The company has applied the requirements of IFRS 2 'Share-based
payment'. The Company issues equity-settled share-based payments to
certain employees of its subsidiary. Equity-
settled share-based payments are measured at fair value
(excluding the effect of non market-based vesting conditions) at
the date of grant. Where services are from employees, fair value is
determined indirectly by reference to the fair value of the
instrument granted. The fair value determined at the grant date of
the equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Company's
estimate of shares that will eventually vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any
cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital and
share premium.
Fair value is measured based upon a Black-Scholes pricing
model.
The Company recognises the cost of the share options granted to
the employees of its subsidiaries as an increase in the cost of
investment with a corresponding increase in equity.
Details of the share option valuation are set out in Note 21 of
the Group account.
g) Income tax
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting periods, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This
involves comparison of the carrying amount of assets and
liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, or on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
h) Income tax (continued)
Deferred tax liabilities are provided for in full. Deferred tax
assets and liabilities are calculated without discounting, at tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (tax laws)
that have been enacted or substantively enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the income statement,
except where they relate to items that are charged or credited
directly to equity in which case the related deferred tax is also
charged or credited directly to equity.
Tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as
deferred tax assets. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be
available against which the asset can be recognised and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
2 staff numbers and costs
The average monthly number of people employed by the Company
(including Executive Directors) during the year, analysed by
category, were as follows:
9 months
ended 31 12 months
December ended 31
2016 March 2016
No No
Administrative staff 8 8
The aggregate payroll costs were as follows:
9 months
ended 31 12 months
December ended 31
2016 March 2016
GBP000 GBP000
Wages, salaries and fees 203 543
Social security costs 17 48
Pension costs 2 33
222 624
========== ============
Details of the Directors' remuneration can be found in the Group
Financial statements in Note 7.
3 tangible fixed assets
Fixtures,
fittings
and equipment
GBP000
Cost
At 31 March 2016 103
Additions 9
At 31 December 2016 112
--------------
Depreciation
At 31 March 2016 59
Charge for the year 23
At 31 December 2016 82
--------------
Net Book Value at 31 December 2016 30
==============
Net Book Value at 31 March 2016 44
--------------
4 investments
Investments in shares of subsidiary undertakings:
GBP000
At 31 March 2016 6,867
Impairment charge for the year (3,238)
At 31 December 2016 3,629
========
The Company tests for impairment where there are indications
that investment may be impaired. The recoverable amounts of the
above investments which relate to trading entities have been
determined from value in use calculations based on cash flow
projections from formally approved budgets for 2017/18, which are
then extrapolated over 5 years and a terminal value applied to the
year 5 cash flow.
The major assumptions are as follows:
%
9 months to 31 December 2016
Pre-tax discount rate 14.5
Growth rates in periods 2-5 0
Terminal value 2.0
12 months to 31 March 2016
Pre-tax discount rate 14.6
Growth rates in periods 2-5 0
Terminal value 2.0
Operating margins have been based on past experience and future
expectations in the light of anticipated economic and market
conditions. Discount rates are based on the Group's weighted
average cost of capital, this is then adjusted to reflect
management's assessment of specific risks related to the cash
generating unit. Growth rates beyond the first five years are based
on economic data pertaining to the region concerned
An impairment charge of GBP3,238,491 (31 March 2016: GBP667,401)
was recognised against the investment in the trading
subsidiaries.
All subsidiaries are registered in England and Wales.
Subsidiary Principal Activity Registered office Share ownership Relationship
address type
SnackTime The installation 27 Broad Street 100% Direct
UK Limited and operation of Wokingham
snack vending machines, Berkshire
vending machine RG40 1AU
holding company
for the Group.
Snack in The Install and offers 27 Broad Street 100% Direct
Box Limited compact vending Wokingham
("SITB") machines and honesty Berkshire
boxes to business RG40 1AU
customers on a
Free-on-loan basis
through a franchise
network.
Drinkmaster The manufacture 27 Broad Street 100% Direct
Limited and sale of single Wokingham
portion beverages Berkshire
called 'Drinkpacs' RG40 1AU
together with the
sale of associated
food and drink
products.
Uvenco Limited The supply and 17 Rufus Business 100% Direct
(formerly operation of vending Centre
VMI (Blackburn) machines and sale Ravensbury Terrace
Limited) of associated food London
and drink products. SW18 4RL
Simply Drinks The supply and 27 Broad Street 100% Direct
Limited operation of vending Wokingham
machines and sale Berkshire
of associated food RG40 1AU
and drink products.
Vendia UK A holding company. 27 Broad Street 100% Direct
Limited Wokingham
Berkshire
RG40 1AU
Drinkmaster A holding company. 27 Broad Street 100% Indirect
Holdings Limited Wokingham
Berkshire
RG40 1AU
5 debtors
31 December 31 March
2016 2016
GBP000 GBP000
Amounts due within 1 year
Trade debtors 64 93
Amounts owed by subsidiary
undertaking - 1,372
Prepayments 134 134
Other debtors 31 6
229 1,605
============ =========
6 current liabilities
31 December 31 March
2016 2016
GBP000 GBP000
Amounts due within 1 year
Bank overdraft (secured) - 63
Bank loan (secured) 595 560
Trade creditors 148 283
Amounts owed to subsidiary
undertakings 8,515 8,269
Social security and other taxes 227 528
Accruals & deferred income 164 182
Other creditors 24 27
9,673 9,912
============ =========
7 borrowings
Terms and conditions of outstanding loans at the period end were
as follows:
31 December 31 March
Interest rate Year of maturity 2016 2016
% GBP000 GBP000
Redeemable loan notes 12% Fixed 2018 40 40
Convertible loan notes 7% Fixed 2018 40 40
2.75% over base
Bank overdraft rate 2016 - 635
Bank loan 6% over LIBOR 2018 - 1,832
Invoice discount facility 21% fixed 2017 674 -
Cleitus loan 8% fixed 2018 400 -
The fair value in each case equates to the carrying book value
with the exception of the convertible loan note. All loans are
denominated in sterling. Additional disclosures in respect of the
company's borrowings have been provided in Note 17 of the Group
financial statements. The invoice discounting facility is secured
against the trade debtors, properties, and vending machines held by
the Group. All other loans are unsecured.
31 December 31 March
2016 2016
GBP000 GBP000
Amounts payable under bank loans
& loan notes
Within one year 595 560
1-2 years 480 -
2-5 years - 1,352
1,075 1,912
============ =========
8 SHARE CAPITAL
31 December 31 March
2016 2016
GBP000 GBP000
Allotted, called up and fully paid
equity share capital
At 31 December 2016 (ordinary
shares of GBP0.02 each) 1,529 1,492
============ =========
See Note 19 of the group accounts for details of the share
issues in the current and prior period.
9 share premium and reserves
Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal
value.
Share option reserve Cumulative share option expense recognised.
Capital redemption reserve Amounts transferred from share
capital on redemption of issued shares which arose following a
share reorganisation
Warrant reserve Cumulative fair value of warrants in issue.
Retained deficit Cumulative net gains and losses recognised in
the consolidated statement of comprehensive income.
10 equity-settled share option scheme
Details of the company's share option scheme are set out in Note
21 of the consolidated financial statements.
11 related party transactions
Details of the company's related parties are set out in Note 24
of the consolidated financial statements.
12 post balance sheet events
Details of post balance sheet events have been disclosed in Note
27 to the Group financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCGDLBGDBGRC
(END) Dow Jones Newswires
June 30, 2017 02:01 ET (06:01 GMT)
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