Consolidated Vending plc
('CV' or 'the Company')
Directors' report and financial statement
Chairman's statement
I am pleased to present the maiden results of Consolidated Vending Plc ("CV"). CV came together on 23 June 2006 when
BFresh Limited (`BFresh') was joined with Snap Digital Imaging Limited ("Snap"), at that time I was appointed
Non-Executive Chairman having held the same position with Snap for the previous six years. On 13 December 2006, CV was
admitted to AIM (formerly the Alternative Investment Market). These results cover the period from incorporation on 6
June 2006 to 31 December 2006, effectively being the trading period since 23 June 2006 for Snap (photobooths) and BFresh
(toiletry vending).
As already disclosed at the time of flotation, Snap did not renew its photobooth contract with the Post Office in 2006,
having previously held the contract for some six years. Snap is the largest part of CV and the Post Office contract was
the largest income stream within Snap. As a consequence of our withdrawal from the Post Office, we now have some 300
photobooths in storage for which we are seeking contracts. The terms which the Post Office were seeking for renewal
were, in our opinion, uncommercial and we therefore ceded the contract to our main competitor. We continue to be
unwilling to place photobooths on uncommercial terms. We consider that the terms upon which our only competitor is
prepared to place photobooths do not provide a long term sustainable business, we therefore have little choice but to
continue seeking to place our booths elsewhere until reality comes back to the market. We refuse to sacrifice profit
and cash for the sake of top line turnover growth. Current trading is at acceptable levels within the existing Snap
estate of 425 photobooths.
The BFresh business is a small part of CV. We continue to refine our approach in this market place where we have over
600 machines in place. There are significant differences between the photobooth market and the toiletry vending market,
in particular with toiletry vending providing a far lower weekly take per machine than photobooths.
It remains our intention to bring a number of vending machine operations within the group and we are actively seeking
new operations. AquaPolar has significant technical challenges to overcome in order to bring it to the UK market, our
management team are working on these. Powerpod (phone battery recharging vending) is an insignificant 65% subsidiary of
BFresh which we took control of on 23 June 2006, we are currently in the process of closing Powerpod down as it has
proved uncommercial.
These results include a very significant FRS 20 `Share Based Payments' charge of �1,168,000 for share options. The
financial information of Snap and BFresh included within the Admission Document did not incorporate the effect of FRS 20
since this did not become UK GAAP ("Generally Accepted Accounting Principles") for private companies until 1 January
2006. Without this charge our results for the period would have shown a profit before taxation of �106,000.
Since the year end new debt and equity financing has been obtained totalling �975,000 before costs. This funding has
been utilised to repay all the 3i debt of �1.55 million at a discount of �450,000 and to assist the share purchase of
Kiddies Rides (UK) Ltd for �600,000. Kiddies Rides (UK) Ltd is a UK operator of kiddie rides which will add a new
product range to the Group, a wider customer base and provides synergies with the Group's photobooth business due to the
similarity of locations.
RJ Steele
Chairman
28 June 2007
ENQUIRIES TO:
Consolidated Vending plc 01494 754262
Andrew Coll
andrew.coll@cv-plc.co.uk
SVS Securities plc 020 7638 5600
Ian Callaway
Peter Manfield
ARM Corporate Finance Limited 020 7512 0191
Nick Harriss
About Consolidated Vending plc:
Consolidated Vending plc operates over 1,000 vending machines throughout the UK
including photobooths, purified water, toiletries and kiddie rides. CV is a
British company recently listed on the London Stock Exchange's AIM market. Our
business model is simple but effective: enabling site owners to profit from
under-utilised space by providing relevant vending services to their customers,
supported by our nationwide team of service engineers. For further information,
please visit
www.cv-plc.co.uk
Consolidated profit and loss account
for the 209 day period ended 31 December 2006
Note 209 day period ended
31 December 2006
�000 �000
Turnover 1,2
Acquisitions 1,545
Cost of sales (856)
Gross profit 689
Distribution costs (502)
Administrative expenses:
Excluding share based payments charge (445)
Share based payments charge (1,168)
Administrative expenses (1,613)
Other operating income (being exceptional
waiver of amounts payable to third parties
of �369,000) 369
Operating loss (1,057)
Other interest receivable and similar income 6 48
Interest payable and similar charges 7 (53)
Loss on ordinary activities before taxation 3 (1,062)
Tax on loss on ordinary activities 8 -
Loss on ordinary activities after taxation
being the loss for the financial period (1,062)
Loss per share 9 0.007p
Diluted loss per share 9 0.006p
All amounts relate to continuing activities which were acquired during the period.
The group had no recognised gains or losses other than the loss for the current period as shown above.
Movements in reserves are set out in note 20.
Consolidated balance sheet
at 31 December 2006
Note 2006
�000 �000
Fixed assets
Intangible assets 10
Goodwill 869
Negative goodwill (69)
Net goodwill 800
Tangible assets 11 1,688
2,488
Current assets
Stocks 13 336
Debtors (including �42,000 due
after more than one year) 14 633
Cash at bank and in hand 955
1,924
Creditors: amounts falling due
within one year 15 (2,404)
Net current liabilities (480)
Total assets less current liabilities 2,008
Creditors: amounts falling due after
more than one year 16 (309)
Net assets 1,699
Capital and reserves
Called up share capital 18 206
Share premium account 20 1,387
Profit and loss account 20 106
Shareholders' funds 1,699
These financial statements were approved by the board of directors on 28 June 2007 and were signed on its behalf by:
AP Coll
Director
Company balance Sheet
at 31 December 2006
Note 2006
�000 �000
Fixed assets
Investments 12 128
Current assets
Debtors 14 2,384
Cash at bank and in hand 727
3,111
Creditors: amounts falling due
within one year 15 (806)
Net current assets 2,305
Total assets less current liabilities 2,433
Creditors: amounts falling due after
more than one year 16 (695)
Net assets 1,738
Capital and reserves
Called up share capital 18 206
Share premium account 20 1,387
Profit and loss account 20 145
Shareholders' funds 1,738
These financial statements were approved by the board of directors on 28 June 2007 and were signed on its behalf by:
APColl
Director
Consolidated cash flow statement
for the 209 day period ended 31 December 2006
Note 209 day period
ended 31
December 2006
�000
Reconciliation of operating loss to
net cash flow from operating activities
Operating loss (1,057)
Depreciation and amortisation charges 494
Profit on disposal of fixed assets (126)
Decrease in stocks 64
Increase in debtors (180)
Decrease in creditors (1,194)
Charge in relation to share based payments 1,168
Net cash outflow from operating activities (831)
Cash flow statement
Cash flow from operating activities (831)
Returns on investments and servicing of
finance 23 (5)
Capital expenditure 23 (12)
Acquisitions and disposals 23 102
Cash outflow before financing (746)
Financing 23 881
Increase in cash in the period 135
Reconciliation of net cash flow to movement
in net debt 24
Increase in cash in the period 135
Cash inflow from increase in debt financing 630
Net debt acquired with subsidiaries (1,454)
Net debt at end of period (689)
Reconciliations of movements in shareholders' funds
for the 209 day period ended 31 December 2006
209 day period
ended 31 December 2006
Group Company
�000 �000
Loss retained for the financial period (1,062) (1,023)
Credit in relation to share based payments 1,168 1,168
New share capital subscribed (net of issue costs) 1,593 1,593
Net addition to and closing shareholders' funds 1,699 1,738
Notes
(forming part of the financial statements)
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in
relation to the financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards under the historical cost
accounting rules.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings
made up to 31 December 2006. The acquisition method of accounting has been adopted. Under this method, the results of
subsidiary undertakings acquired or disposed of in the period are included in the consolidated profit and loss account
from the date of acquisition or up to the date of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own profit and
loss account.
The financial statements are prepared on a going concern basis notwithstanding the consolidated net current liabilities
position at 31 December 2006. The directors believe this to be appropriate for the following reasons. Since the period
end the company has secured additional funding from existing shareholders and debt providers. The directors have
prepared projected cash flow information for the period to June 2008. On the basis of this cash flow information, the
directors consider that the company will continue to operate within its available cash resources and bank facilities.
Any financial forecasts by their nature contain uncertainty.
Goodwill and negative goodwill
Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value of the
separable net assets acquired) arising on consolidation in respect of acquisitions is capitalised. Positive goodwill is
amortised to nil by equal annual instalments over its estimated useful life of 20 years. Any impairment charge is
included within operating profits.
Negative goodwill arising on consolidation in respect of acquisitions is included within fixed assets and released to
the profit and loss account in the periods in which the fair values of the non-monetary assets purchased on the same
acquisition are recovered, whether through depreciation or sale.
On the subsequent disposal or termination of a business acquired, the profit or loss on disposal or termination is
calculated after charging (crediting) the unamortised amount of any related goodwill (negative goodwill).
In the Company's financial statements investments in subsidiary undertaking, are stated at cost less amounts written
off.
Fixed assets and depreciation
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal
instalments over their estimated useful economic lives as follows:
Photobooths - 6 years
Plant and machinery - 3 years
Motor vehicles - 3-4 years
Fixtures and fittings - 4-5 years
Stocks
Stocks are stated at the lower of cost and net realisable value.
Notes (continued)
1 Accounting policies (continued)
Pre-contract costs
When the company engages in negotiating significant contracts and incurs directly attributable pre-contract costs, these
are capitalised within debtors and written off over the life of the contract from the commencement of the revenue flow,
once there is a high degree of certainty that a contract with a positive net present value will be obtained.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of transaction. Monetary
assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance
sheet date and the gains or losses on translation are included in the profit and loss account.
Taxation
The charge for taxation is based on the result for the period and takes into account taxation deferred because of timing
differences between the treatment of certain items for taxation and accounting purposes. Except where otherwise
required by FRS 19 full provision, without discounting, is made for all timing differences which have arisen but not
reversed at the balance sheet date.
Leases
Where the company enters into a lease 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 a tangible fixed asset
and is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Future instalments
under such leases, net of finance charges, are included in creditors. Rentals payable are apportioned between the
finance element, which is charged to the profit and loss account, and the capital element which reduces the outstanding
obligation for future instalments. All other leases are treated as operating leases and rentals are charged to the
profit and loss account on a straight line basis over the life of the lease.
Post-retirement benefits
The company makes contributions to defined contribution pension arrangements on behalf of certain employees. The assets
of the scheme are held separately from those of the company in independently administered funds. The amount charged
against profits represents the contributions payable for the period.
Share based payments
The fair value of shares or options granted after 7 November 2002 is recognised as an employee expense on a straight
line basis in the profit and loss account with a corresponding movement in equity. The fair value is measured at grant
date and spread over the period during which the employees become unconditionally entitled to the options (the vesting
period). The fair value of the options granted is measured using an option pricing model, taking into account the terms
and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect an
estimate of the number of shares or options that are expected to vest.
The fair value of shares or options granted has been determined using the Black-Scholes model.
Cash
Cash for the purpose of the cash flow statement comprises cash in hand and deposits repayable on demand less creditors
payable on demand.
Turnover
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to
customers, the substantial majority of which arose in the United Kingdom in relation to its principal activities.
Notes (continued)
2 Segmental analysis
The directors consider that substantially all of the group's turnover originates from and is sold into the United
Kingdom. An analysis of the group's turnover by market segment is as follows:
209 day period ended December 2006
Photobooths Toiletries Total
�000 �000 �000
Turnover 1,459 86 1,545
Operating (loss)/profit (1) 75 74
Net interest 11 (16) (5)
Segment profit before taxation 10 59 69
Share based payments charge (1,168)
Net common income 37
Group loss before taxation (1,062)
Substantially all of the group's net assets originate in the United Kingdom. An analysis of the group's net assets by
market segment is as follows:
31 December 2006
Photobooths Toiletries Total
�000 �000 �000
Net segment assets 798 212 1,010
Unallocated net assets 689
Consolidated net assets 1,699
Notes (continued)
3 Loss per share
Basic
The basic loss per share is calculated by dividing the loss after taxation of �1,062,000 by the weighted average number
of ordinary shares in issue during the period of 153,412,178 ordinary shares of 0.1p each.
Diluted
The diluted loss per share is calculated in accordance with Financial Reporting Standard 22 ("FRS 22"). This
calculation uses a weighted average number of ordinary shares in issue adjusted to assume conversion of all dilutive
potential ordinary shares as shown below:
Loss Weighted Loss per
number of share
shares (pence)
�000
Basic loss per share 1,062 53,412,178 (0.007)
Effect of dilutive securities:
Employee share options - 36,730,769 0.001
1,062 190,142,947 (0.006)
FRS 22 `Earnings per share' requires presentation of diluted earnings per share when a company could be called upon to
issue shares that would decrease net profit or increase net loss per share. For a loss making company with outstanding
share options net loss per share would only be reduced by the exercise of in-the-money options. Since it seems
inappropriate to assume that option holders would act irrationally no adjustment has been made for out-of-the-money
options.
4 Called up share capital
2006
�000
Authorised:
1,000,000,000 ordinary shares of 0.1p each 1,000
Allotted, called up and fully paid:
205,789,474 ordinary shares of �0.1p each 206
The company was incorporated on 6 June 2006 with an authorised share capital of �1,000,000 divided into 100,000,000
Ordinary shares of �0.01 each, of which 2 such Ordinary shares were taken up by the subscribers.
On 6 June 2006, the share capital was subdivided into 1,000,000,000 Ordinary shares of 0.1p each.
On 23 June 2006 the company issued 50,199,980 Ordinary Shares and the 20 Ordinary Shares issued on incorporation (as
they had become) were credited as fully paid in cash.
On 23 June 2006, the company entered into the BFresh Purchase Agreement with the BFresh Vendors under which (as amended)
the company agreed to purchase the entire issued share capital of BFresh Limited for a consideration of 82,200,000
Ordinary Shares of 0.1 pence each in the company.
On 23 June 2006, the company issued 27,600,000 Ordinary Shares credited as fully paid in cash for 0.18p each.
On 17 November 2006, the company allotted 10,789,474 Ordinary shares to SVS Securities plc for cash at par, conditional
on Admission.
On 6 December 2006, the company allotted 35,000,000 Placing Shares to the Placees conditional on Admission credited as
fully paid at the Placing Price.
The issued share capital of the company on Admission was therefore 205,789,474 Ordinary Shares, all of which are fully
paid up.
On 23 June 2006 BFresh Limited lent the company �255,000 by way of an interest free loan.
5 Share premium and reserves
Group
Share premium Profit and
account loss account
�000 �000
Arising on share issues (net of issue costs) 1,387 -
Loss for the period - (1,062)
Reversal of charge in relation to share based payments - 1,168
At end of period 1,387 106
Company
�000 �000
Arising on share issues (net of issue costs) 1,387 -
Loss for the financial period - (1,023)
Reversal of charge in relation to share based payments - 1,168
At end of period 1,387 145
The profit of the holding company dealt with in these accounts amounted to �145,000.
The cumulative amount of goodwill arising from acquisitions in current financial period is �22,000.
6 Analysis of cash flows
209 day period
ended 31 December2006
�000 �000
Returns on investment and servicing of finance
Interest paid (53)
Interest received 48
(5)
Capital expenditure and financial investment
Purchase of tangible and intangible fixed assets (12)
(12)
Acquisitions and disposals
Purchase of subsidiary undertakings (718)
Net cash acquired with subsidiaries 820
102
Financing
Issue of ordinary share capital 1,511
New loans 1,300
Repayments of amounts borrowed (1,896)
Capital element of finance lease payments (34)
881
7 Analysis of net debt
Cash flow Acquisitions At end
of period
�000 �000 �000
Cash at bank and in hand 135 820 955
Debt due within one year (1,306) (29) (1,335)
Debt due after one year 1,936 (2,245) (309)
Total 765 (1,454) (689)
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