SnackTime shares plunge on profit warning

SnackTime, an AIM-listed vending company, has admitted that its trading performance since November has fallen significantly short of market expectations, due in part to sales in its VMI subsidiary missing expectations.

SnackTime, an AIM-listed vending company, has admitted that its trading performance since November has fallen significantly short of market expectations, due in part to sales in its VMI subsidiary missing expectations.

The group said that despite making "considerable progress" in its turnaround over the past six months, including the stabilisation of sales in three out of four divisions, tough market conditions have continued and the revised routing plan at VMI took longer than planned.

The group said cost savings in the business were beginning to show through, but the ancillary cost savings around vehicle leases will not materialise until the next financial year due to contract terms.

It also revealed that it has changed its accounting policy in relation to recognition of brand support income to a more prudent approach than in prior years.

"In August 2012, cognisant that the company might breach one of the covenants of its banking facility in December 2012, we approached our bank with a request to extend the term of our loan and revise our banking covenants," SnackTime said.

"Discussions are still ongoing and expected to conclude before the end of March 2013. The company is operating within its facilities and is confident of a satisfactory outcome to these discussions.

"The company is in discussions with certain of its larger shareholders regarding the proposed issue of £800k of five-year convertible loan notes to provide funds for the company."

The update prompted Westhouse Securities to cut its target price on the stock from 50p to 20p.

The share price plunged 40.91% to 6.50p by 13:47.

NR

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020