Gary Stevens believes the half-year loss can be turned around. Photo / Kenny Rodger
Gary Stevens believes the half-year loss can be turned around. Photo / Kenny Rodger
KEY POINTS:
Vending technology firm VTL Group will make a first-half loss but a profit in the full year, as long as the exchange rate does not rise any further, the company says.
Chairman Gary Stevens said at yesterday's annual meeting the exchange rate would have a $4.5 million impacton the half-year to December - leading to an anticipated loss.
"I want to stress that this [$4.5 million] is an unrealised foreign exchange loss, which some market commentators and experienced analysts predict will reverse some time in the next 12 months," he said.
The loss was related to the value of overseas investments and could be reversed by a fall in the exchange rate.
The NZX-listed company - which turned a $9.8 million loss into a $2.3 million net profit last year - did not provide a full-year forecast but anticipated it would remain profitable as long as the exchange rate did not further deteriorate.
"There's no reason why that [profitability] shouldn't happen, the issue is the exchange rate," Stevens said after the meeting.
The company anticipated exercising an option to take majority control in Service America this financial year. That would boost annual revenue to almost $300 million.
Steady progress had been made restructuring Service America into a franchising company and it was returning trading profit of about $1.6 million a month, Stevens said.
"It is America's fourth-largest independent vending company and ... covers 60 per cent of North America," he said. "That's around 37,000 machines on approximately 10,000 sites - the equivalent of more than 400 24seven franchises."
VTL's vending machine stock was expected to generate about $180 million in franchise fees in the next three to five years, he said.
The company, which recently bought the vending routes of Californian-based Nor-Cal Beverage, wanted to make more acquisitions.
Apart from selling franchises the company would continue making money from monthly monitoring fees and sales royalties, he said.
VTL's share price closed unchanged yesterday at $1.42.
