Admission to Trading on AIM
December 13 2006 - 1:00AM
UK Regulatory
Consolidated Vending plc ("CV" or the "Company")
Admission to Trading on AIM
13 December 2006
Consolidated Vending plc, (ticker: CVD), a recently formed acquisitive company
established to bring together similar sector vending businesses into a single
group and to bring new products to market, announces today that the Company's
Ordinary Shares have been admitted to trading on the Alternative Investment
Market ('AIM') of the London Stock Exchange.
The flotation follows the raising of �1.05 million via a placing of 35,000,000
new Ordinary Shares at 3 pence each.
Highlights
* Diversified revenue streams and long-term contracts with large, prominent
clients;
* CV is a leading operator of both photo booth and toiletries vending in the
UK;
* Operates circa 1,000 vending machines via two business divisions;
* Operates in a growing market, worth in excess of �3 billion;
* CV has a contract with Aqua Polar Inc. for the marketing and distribution
of Aqua Polar branded purified water - a product that the Directors believe
will be unique in the UK and could become a significant product for the
Group;
* The Group is cash-generative and offers substantial cash flow and earnings,
whilst low overheads can produce attractive profit margins;
* Earnings are underpinned by contracts with prominent clients, including
national supermarkets and leading fitness and sports clubs;
* Acquisitions are being identified that will optimise the use of the Group's
current national infrastructure and that are expected to increase the
Group's growth;
* An experienced management team;
* The Group has Debt Finance from 3i Group plc, one of the original investors
in it's subsidiary Snap Digital Imaging Limited's business, which
effectively increases the return for Ordinary Shareholders;
* EIS Qualifying.
For further information:
Consolidated Vending plc 01494 513 927
Dick Steele
Andrew Coll
SVS Securities plc 020 7638 5600
Ian Callaway
ARM Corporate Finance Ltd 020 7512 0191
Nick Harriss
Cityroad Communications 020 7248 8010
Paul Quade 07947 186694
Admission Statistics
Admission Price 3 pence
No. of Ordinary Shares in issue prior to the Placing 160,000,000
No. of Placing Shares 35,000,000
No. of Broker Shares 10,789,474
No. of Acquisition Options 40,000,000
No. of Ordinary Shares in issue on Admission 205,789,474
No. of Warrants* 35,000,000
Percentage of enlarged issued Ordinary Share Capital 17.01%
represented by the Placing Shares
Market Capitalisation of the Company at the �6.17 million
Admission Price
* A total of 35,000,000 warrants have been issued in connection
with the placing. The warrants have been admitted to trading on
AIM under the ticker CVDW.
Substantial Interests
Name % of Issued Share % of Issued Share
Capital prior to Capital upon
Admission Admission
Share Nominees Ltd* 25.88% 30.65%
Whitesun Limited 9.70% 7.54%
Arc Growth Company VCT plc 6.25% 4.86%
Lauren George 5.90% 4.58%
Troff Limited 5.90% 4.58%
Mario Gregariou* 3.85% 4.03%
SVS Securities plc 0.00% 5.24%
Robert Wing 0.00% 3.68%
* The Ordinary Shares registered in the name of Share Nominees
Limited are held on behalf of a number of beneficial owners; this
includes the shareholding of Mario Gregariou.
Information on the Company
Consolidated Vending plc is a recently formed acquisitive company established to
bring together similar sector vending businesses into a single group and to
bring new products to market. Vending is a relatively simple business, offering
sustainable cash flows and earnings. The classic buy and build acquisition model
will generate improved returns via operating efficiencies and the removal of
duplicate costs. CV offers an opportunity for investors to tap into the growth
of the vending market, where sales were estimated to have grown by approximately
3.1% in 2005 to more than �3 billion per annum. The Group has large, prominent
clients, diversified revenue streams and an experienced management team. CV's
business is cash generative and the Group is expected to move into profit in the
next financial year.
The Group has two trading subsidiaries: Snap Digital Imaging Limited ("Snap") &
B Fresh Limited ("B Fresh") which collectively operates circa 1,000 vending
machines in the UK and can demonstrate a proven demand for their established
products. The Group has a further two products under evaluation.
Snap
The Directors believe that Snap is the second-largest photo booth operator in
the UK. It operates approximately 500 coin operated photo booths in the UK
primarily from locations in supermarkets such as WM Morrison Supermarkets, J
Sainsbury and ASDA. Snap also maintains other independent sites located at
shopping centres, universities and railway stations. The Directors estimate that
this equates to circa 7% of the UK market. Photo booths are used for passports,
driving licences, bus passes, university passes and other identification
purposes as well as for fun. On average, a UK citizen uses a photo booth every 3
years.
The Company hopes to benefit from the introduction of a national identification
scheme, where current thinking is that the ID enrolment process will be as per
the passport enrolment. Initially, the ID card will not be mandatory but where
an existing passport holder applies for an ID card, then a printed photo will be
required. It is the Directors' understanding that these applications should
provide growth for the UK photo booth market. It must be noted that the ID card
process has not yet been agreed or ratified by the Government and is therefore
subject to change and even complete cancellation.
Snap is a wholly owned subsidiary of CV. The company was founded in 1998 and
generates almost all of its revenue from the operation of photo booths, with
remaining revenue deriving from sales of booths, media, parts and servicing. The
Directors believe that Snap is the UK's second-largest photo booth operator
after Photo-Me International plc, which is the only listed operator in the
sector and had a market capitalisation on the London Stock Exchange of �329
million (as at 9 November 2006).
Snap utilises advanced technology which speeds up processing times and can allow
for the addition of further services. Snap's booth operating software is based
on the Windows, and therefore, other applications can easily be written to
enhance the services provided. This has allowed Snap to develop what the
Directors believe is a competitive advantage in the marketplace, adding value to
the existing photo booth services and enabling it to expand its market share.
Snap built the business within 4 years to approximately 900 units. Following the
conclusion of the Post Office contract in 2006, the number of booths on site was
reduced to approximately 500. The Directors intend to place the surplus booths
from the Post Office contract with other clients. While the loss of this
contract has led to a recent dip in profitability, the Directors are not
prepared to take on or renew contracts that will not allow the Group to make the
necessary margins to achieve profitability.
Snap uses fast processing and flexible software to vend a photo, portrait or
caricature in as little as 18 seconds and is accredited by the UK Identity and
Passport Service for the new passport regulations. Snap boasts an array of
products which are updated on a regular basis. Following installation, each
photo booth has minimal upkeep costs, and is quite resilient to damage. A single
booth uses only 1 square metre of floor space and the sides of the booth can be
used for advertising. Snap currently has the capacity for 500 square metres of
retail space across the UK from which it could offer advertising space in high
foot-fall locations. This is a service the Group intends to promote in the
future.
An advantage of the technology used by Snap is its environmentally friendly
nature. All of Snap's photo booths are fully digital and, unlike older models,
do not involve the use of any harsh or dangerous chemicals. This is also a
benefit when ensuring the health and safety of its engineers.
B Fresh
B Fresh is a wholly owned subsidiary of CV. It was established in 2001 and sells
quality, miniature toiletries through health clubs. Sites sign contracts to use
the machines for up to five years. Machines are already installed with prominent
companies such as, Fitness First, David Lloyd Leisure, JJB Sports and LA
Fitness. In total, B Fresh currently operates over 500 machines throughout the
UK, of which approximately 300 machines are installed in the Fitness First
clubs.
B Fresh owns the stocks, which are conveniently sized in 35 - 50ml packages, and
the vending machines, which it installs and maintains. Clients receive a
commission on their machine sales, which provides them with a new revenue stream
- at no additional cost. B Fresh now utilises the distribution, maintenance and
service facilities of CV which has improved efficiency and, upon proving the
commercial viability of the existing estate, it is planned to significantly
increase the use of this service amongst other customers by the end of 2007.
Board of Directors
Richard John Steele - Non-Executive Chairman
Andrew Patrick Coll - Chief Executive
Jonathan Charles Dowse - Finance Director
Renwick Robert Haddow - Non-Executive Director
SVS Securities plc is the Broker and ARM Corporate Finance is the NOMAD to the
Company.
Copies of the Admission Document are available from the offices of ARM Corporate
Finance, 12 Pepper Street, London E14 9RP.
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